As an SME owner, one of the biggest challenges you’ll face is managing your finances. Not everyone is skilled in healthy money management, which means you could end up making bad financial decisions that could eventually damage the business.If you’re looking to get on top of your finances, here you’ll discover some great tips you can follow.
Set aside money for growth
At some point, you’re going to want to expand your business and it’s pretty hard to do that without any additional funds. While business finance is always an option, it’s actually a better idea to set aside a little money when you can.
Not only will setting aside a little money help to fund future growth, but it also covers you in case anything unexpected crops up.
Eliminate late-paying clients
One of the biggest headaches of running an SME, is chasing unpaid invoices. While it’s normal for clients to experience payment issues from time to time, if you have a consistently late paying client, it’s time to look at ways to eliminate the problem.
One tip you could use, is to change your payment terms. If the client pays within 10 days, rather than 30, they benefit from a 2% discount off the cost. Or, if this doesn’t feel feasible, you could always warn consistently late payers that you will no longer be able to do business with them if the invoice isn’t cleared within the specified time limit. It may seem harsh, but when invoices are paid late, it can have a significant impact on your cash flow.
Keep track of business costs
Do you keep track of your business costs? If not, it’s definitely time to start. Following your business expenses will let you see where your money is going, and more importantly, if any savings can be made. Take a look at how much you’re paying your suppliers every month for example, could you perhaps switch to a cheaper one? Monitoring your costs will help you to get a better idea of how well the business is doing.
Seek professional financial advice
Finally, a great way to manage your business finances is to seek professional help. Companies such as Wellington Management, can help you to manage your business finances, eliminating the stress and making the day to day running of the company much more organised.
Overall, it can be tough managing your business finances as an SME owner. However, help is available, and the tips above can really help to make it much simpler. Don’t forget, if you’re really struggling, you can always seek professional financial advice to get your business finances sorted.