Most people would agree that things like nutrition and exercise lead to a healthier and happier individual. This same principle applies to the financial health of your business.
In order to maintain a successful and thriving business, it’s important to stay healthy when it comes to your finances. Here are five ways to boost your financial health as we come out of lockdown this summer:
1. Take control of your financial situation
Establishing a comprehensive bookkeeping system is essential to monitor your financial situation. Cloud accounting software, like Xero, can be used from any device – all you need is an internet connection. It gives you an up-to-date snapshot of how your business is performing, giving you the insights you need to make the right decisions for your company. The time-consuming accounting tasks are automated, and anyone from your team can access information and collaborate on activity.
2. Find ways to save smartly
In addition to paying yourself, it’s important to set aside money and look into growth opportunities. Saving doesn’t have to feel drastic. There are opportunities to save smartly in all areas of your business, from project management to hiring. Making sure that you have the best deals from suppliers, negotiate better deals with long-term product merchants, and look at saving small amounts on a monthly basis that can be used for future projects are three ways to start saving.
3. Check your insurance regularly
From professional liability and property to product liability and vehicle insurance, there are many different types of insurance. Take the time to decide which ones are most suitable for your business. This will not only save you from unnecessary stress in the long term but will also save you from hefty costs if things go wrong.
4. Keep on top of invoices
Dealing with invoices can be a hassle. Monitoring them closely and keeping them clean, neat and timely will ensure clarity and will catch any errors as soon as possible – avoiding unwanted mistakes that could impact the financial health of your business.
5. Build a cash flow forecast
Even if you aren’t immediately concerned about running out of cash, a cash-flow forecast is essential for any business. With the help of a cash flow forecast, you can map what has been going out and coming in, while getting an up-to-date view of your business’ cash flow. The first step when drawing up a cash flow forecast is to consider your revenue. Making realistic revenue projections based on customer buying habits in the last year is important at this stage. Then you should consider how much of this will actually go into your business’ pocket by examining your expenses.
As we come out of the lockdown this summer, we all want our businesses to bounce back better. By following these five simple steps, you can ensure the financial health of your business easily and efficiently – and do just that. After all, healthier businesses are more successful businesses – and have happier owners.
Words by Donna Torres, General Manager of SMB Sales & Operations UK & EMEA, Xero