The difference between profit and loss can be quite small. A few extra dollars spent on stationery or a higher utility bill than normal can throw an entire balance sheet off-course. To manage your business’s money more effectively, there are five simple tasks you can perform to walk on the path towards profitability.
Become a Negotiator
To save a little money, you should try to improve your negotiation skills. This is important for when you want to get the best deal on supplies and utilities. If you can haggle for a few dollars off your next order, this can add up to something more substantial when doing the annual accounts.
When negotiating for a better deal, mention that you can get the product or service you want to buy for cheaper elsewhere. This may press the supplier into accepting a lower price.
Every business has monthly expenses they need to record. The biggest ones are payroll and office hire, but even the smallest ones should be included in the accounts. Utilities such as electricity and water, broadband and insurance are all common business expenses.
If your business pays a set amount for all of these, then calculating expenditure is going to be far easier. It also makes budgeting easier for any new or unexpected spending that is on the horizon.
Set Spending Limits
If your business has a guaranteed income each month, budgeting will become even easier. However, making sure you don’t spend more than you earn is still a necessity. With that in mind, set a limit on how much your business spends as a whole.
This tactic will help you and your employees to be more mindful of what they spend and whether they can get what they need for less.
Use Accounting Software
Doing all of the math yourself is possible, but it takes time and can be a little risky. As an alternative, using software to manage your finances will save time and reduce the possibility of errors being made.
Payroll software in particular can be useful. It can help to make sure that your employees get paid and that any money owed in tax to the authorities is also sent on time.
Hire Financial Experts
To check where every single Dollar or Cent goes, it takes a lot of work. Hiring a full-time or even a part-time member of staff to look after the company’s money will take care of that. Someone with qualifications and/or experience in accounting is essential for such a role.
They should be able to arrange payments, look after payroll and monitor the bank account. Having someone like that can also help you to focus on growing the business.