Sage Advice US

Our top 7 money management tips for businesses from 2017

All year long we’ve provided business builders with advice to manage everything from money to people. Today, we’re sharing the top money management articles on Sage Advice from 2017 you may have missed.

Need to add to your list of New Year’s resolutions for your business? Read on.

Tip #1: Start sales forecasting

Put simply; sales forecasting is all about predicting what’s ahead so you can prepare for cash flow peaks and troughs. As soon as you have a month’s sales behind you, you can start forecasting cash flow—using your market knowledge, think about your pricing, the level of competition, the state of the economy and so on, to work out demand. Remember it’s better to be overly cautious than optimistic—that way, you’ll hopefully avoid nasty surprises.

Tip #2: Make sure your financial records are up to date

Businesses with up-to-date accounting records are far better at making informed, educated decisions based on real, current facts. It’s therefore essential that you allocate some time every week to updating your books. With the right tools, you don’t need to spend more than a few minutes a day, but it won’t be long before your business starts reaping the rewards. Keeping your records up to date helps you create and maintain a solid and reliable idea of progress—making it easier to see if you can pay yourself and your employees this month. You need to record revenues, business costs and allowable expenses as they happen. A few minutes a day can save you hours over the course of a year.

Tip #3: Establish better payment terms

To establish payment terms, its key to look at your cash flow, because it’s really important to ensure that you have the sustainable cash to grow your business, it’s very easy to have a profitable business, but actually you could be over trading and your growth could be stunted because you have a lack of cash.

Tip #4: Review your budget

Take the opportunity to review your budget to see where you can cut costs. You may be able to renegotiate with suppliers for lower rates. You may be surprised at how much money you can save by simply asking.

Tip #5: Don’t mix personal and business finances together

To avoid dipping into your business’s accounts, pay yourself bi-weekly or monthly and use that money for your personal expenses. If your salary/wage or commission doesn’t cover your personal expenses, then adjust your personal expenses, don’t kill your business.

Tip #6: Automate the payment process

13% of Organizations lack a dedicated resource to chase late payments. Implementing an automated payment process like e-invoicing eliminates the need for additional manpower. Payments are made on time without prompt aside from your payments software.

Tip #7: Cut unnecessary costs

When it comes to preserving cash flow, think lean and mean. Scrutinize every item you buy, know exactly where your cash is going and always get value for money. Work out what you really need – those office potted plants might look nice but they won’t grow your business.

What are your top money management concerns for 2018? Let us know in the comments below.