Financial management for your enterprise

financial management

Financial management is a bit like housekeeping – but for business, if you stay on top of it, things remain orderly and run smoothly. Take your eye off the ball and before you know it things are piling up, forgotten, lost or just ignored- and when it comes to money none of us can afford that.

There are some things that you can do to keep your finances running smoothly, just like with housework, little and often is the way! Ideally you should try to be financially minded from the moment you start, but really it’s never too late to incorporate good financial practices into your business ‘housekeeping’.

Here’s a few things we’ve pulled together to help keep your business finances tidy-

  • Understand your cash flow (what’s going in and out of your business) then make a budget and then stick to it. Budgets can help you to plan and manage your expenses so it’s really important that you have a crystal clear understanding of your cash flow situation. Remember, a lack of cash can lead to financial difficulties and even bankruptcy.
  • Keeping accurate financial records is essential. Financial records, things like balance sheets, income statements, and cash flow statements provide a snapshot of the financial health of your enterprise. An important consideration when it comes to your record keeping is that you’ll need them for tax purposes, and they can also be used when you are trying to secure funding from banks.
  • After you’ve been so good at keeping those records now it’s time to put them to use! Regularly reviewing can help you to identify when your business is performing well, and also flag up areas that may need improvement early on so you can act before they become serious problems.
  • Tax – this should be at the top of your list when it comes to keeping your financial house in order- you must stay on top of this. It’s crucial for you to understand your obligations and to keep accurate records so you’re paying the correct amount of tax. If you don’t do this, you will be fined and worse still imprisoned. As a business owner it is your responsibility to maintain your businesses’ records and submit them yearly to HMRC.
  • Insurance is another important aspect of finance and probably one that is most easily or frequently forgotten. Your businesses could be required to have insurance, what type depends on your industry and where you carry out your business. There are numerous search engines available that specialise in insurance for small businesses, and you can easily find quotes that best suit your enterprise. A monthly premium may seem expensive now but it’s not only peace of mind, it’s also infinitely less expensive than potential claims.

Finance is crucial to the success of any small business; we all know that. By making sure that you have a solid understanding of financial principles and practices can help your business to manage its money effectively, grow, and ultimately succeed.

If you’d like some more help or advice with respect to finances we have resources on our website, courses and workshops  as well as mentors and coaches with years of experience who can help you to navigate and understand what can be a tricky but vital part of running a business. You can contact us here to find out more about how we can help you and your enterprise.