All entrepreneurs and people involved in startups know how oppressive the bookkeeping and money management in the company is. That is why we have created the Botkeeper. With our innovative solution, your company will work smoothly, and you will be sure that all payments and taxes are under your control. However, some other ways can help you manage finances and, in consequence, grow your revenue as well.
Separate company and private money
The worst thing you can do is to mix company money with private ones. Excess cash makes you more eager to spend it. Unfortunately, it that moment you are tempted to devote excess of money. However, one small mistake and you will end up with financial problems both in the company and in private life.
Separation of company and private finances is an indispensable element that distinguishes commercial companies from unprofessional businesses and makes the funds much more comfortable to control.
Control the value of the company and its assets
Rich people do not talk about their salary. They talk about how much their property is worth. We encourage you to take a similar approach to your company. This one thing will give you information on what happens with your business.
Therefore, prepare a statement in which you will calculate the value of the property. Sum up everything that you have in your company: cash and money on your account, equipment that you could sell, your clients’ debts, the licenses you own. Then subtract the liabilities, that is, the company’s liabilities: loans, unpaid invoices, and various types of debts.
By doing this every month, you will know whether your decisions are multiplying assets and what your access to cash looks like. Additionally, keep the books with the profits from the previous month. This will help you to estimate the value of your business.
Keep your company budget up to date
Your accountant is responsible for the order in financial documents, but the employee will not tell you how to manage all finances – these are two completely different things. Therefore, check the cost and revenue budget yourself.
Share your costs in the budget on permanent – those that do not depend on turnover, and on variables – those that arise only when you sell. Try to keep costs as low as possible and try to convert as many fixed costs into variables. Remember that, unlike revenues, you can control the costs and optimized accordingly to the higher profit.
Value labor costs well
When running a company and preparing price lists and offers, you must have all the costs – including the time of your work – counted out. Ignorance and not taking into account some (often small) costs transforms into significant losses and can even lead to bankruptcy.
Therefore, include your salary in the budget and measure the time needed to carry out the service or devoted to trading.
Wisely manage your supplies
Watch your supplies of goods, products, materials, time. Excess of supplies takes space, time, attention, and often end up destroyed or expired. Take a walk around the office, magazines, and look into the wardrobes. Count how much space occupies the things you do not use.
Separate investments and expenses
You invest your money continuously in the company. New employees, devices, training, programs, meetings with potential clients. That’s why you always ask yourself, “is this said to help me make money?”.
Start focusing on a quick and reliable return on your investment. Take care of your money first and check before you spend it, or you will lose it. In the first step, especially in the beginning, invest in what brings profits in the shortest possible time, for example in Botkeeper.
Control receivables and liabilities
In business, the flow of money and access to cash is critical, and receivables and liabilities are just the flow of money.
Therefore, learn to manage them well. Each company has money with its clients – these are receivables. Remember to secure your transactions, guided by the principle that the higher the amount due, the more cautious approach. Banks do not live on granting loans. Banks live on repaying loans.
If you feel a bit overwhelmed, you can try the free trial of Botkeeper. The program will help you in having all the company’s finances on your hand as well as control the payments.