Managing your own startup is a tough business, especially the financial side of things. When it’s just you by yourself, it’s up to you to take on the roles of accountant and financial director. Staying on top of your business’ finances will be important for many reasons, and it’s essential that you get a handle on things from the outset. The following tips could help you to manage your startup’s finances effectively.
Invest in some accounting software
While many things can be managed via a spreadsheet, accounting software is actually an asset to small businesses. Choosing the right accounting software for your business could leave you with a product that deals with invoicing, paying bills as well as preparing your annual reports automatically, saving you a lot of time and stress.
Keep personal and business finances separate
It can be difficult to separate your personal and business finances when starting up, especially when you’re relying on your personal income to fund the business. To make things easier for you, however, you should keep your finances completely separate. This means setting up a business account and not dipping in from one to fund the other. If you do struggle with your finances, it could be time for you to seek investment or apply for a business loan.
Pay on time
A reason why many startups struggle is because they cannot manage their own cash flow properly, and it’s actually quite easy once you get started. It’s important to pay your bills on time as failure to do so could incur charges and interest, but it is equally important to make sure you invoice on time too. Establish clear payment terms that mean your invoices are paid before you expect your business’ own bills and expenses are due to be paid.
Keep good records
Your startup could be faced with many scenarios which could require someone to look at your records. Tax, applying for investment and even making a sales pitch could require someone to peek at your records at any given time. If somewhere along the line you decide to sell your startup to someone who wants to buy a business, you’ll make an easier sale if all of your records are in order.
Speak to a financial advisor
A financial advisor will be a great asset to your business, especially when you’re setting up. They will have useful financial advice for getting started with your business and will also be able to forecast any problems you may run into or highlight operational costs you may not have considered. It’s worth speaking to a financial advisor before you set up your business, but that doesn’t mean that they aren’t available if you need them at other points to help with your finances
If you really struggle with your business’ finances, you can always hire an accountant. A good accountant could be an asset to your startup business, and many entrepreneurs will seek a remote or freelance accountant at the beginning to avoid the expense of a full-time member of staff. Whether you choose to go down the accountant route or go alone, always ensure that your startups’ finances are in order.