Financial planning can be difficult, and millions of people throughout the world fall into financial trouble every single day. While some people are able to dig themselves out with the help of decent accountants, for a lot of people, their financial trouble marks that start of the end of their business.
With this in mind, accountants advise to take action to make sure that your business’s finances remain in order this financial year. If you don’t, then you and your business could both suffer significant losses, and you may find yourself having to sell or close your business and look for work elsewhere. Out top 3 ways to keep your finances in order this financial year include:
- Keep Clear Records From Day One
When it comes to keeping your finances in order, clear record keeping is an absolute must. It doesn’t matter how big or small your business is or how much paperwork you have – you should file everything clearly, and record all financial transactions using decent accounting software.
If you run a larger business which employs other people, you will need to pay wages. Make sure that you keep clear records of how much you have paid your employees, how much tax you have deducted from their wage and how much super you have paid into their funds. If you don’t do this, you will find yourself in all sorts of trouble when it comes time to report things like the amount of tax withheld.
- Use A Cash Flow Forecast
Cash flow forecasting is an extremely useful tool which can help you get an idea of what your finances might look like in the future. Basically, you need to add up all of your day to day running costs for your business for the time period of your forecast, add any one-time costs, and note the total as your expenses. You then need to add up your expected income from your business and other streams over the forecast period, and note this as your income. If your expected income isn’t more than your costs, then you are in trouble, and you should revise your financial practices before you reach the point of no return.
- Employ A Decent Accountant
If you find yourself struggling to keep decent financial records, then consider employing a qualified accountant or bookkeeper part time. They will make sure that everything is recorded, that your filing is kept in order, and that your finances are healthy.
Final Word
If you are having or have had trouble keeping your finances in order in the past, you need to think about how you are going to turn this around. Keep clear records, consider using cash flow forecasting and, if you have to, think about employing a part time bookkeeper to do your record keeping for you.