How To Improve Your Financial Management
Financial management is an issue that many businesses struggle with and finding ways to improve your financial management is essential for success. If you want to stay in control of your finances, you should consider our top tips for financial management.
Roger Hatherall & Co can provide you with a range of services to ensure you manage all finances effectively and financial performance never drops.
Manage Your Invoices
Many businesses will be happy making a sale and gaining revenue for the company. However, managing and monitoring your invoices should always be completed, rather than assuming money is received and payments have gone through. Late payments or no payment whatsoever can become a common occurrence and unless you manage invoices, it could slip past you.
Failing to manage invoices could lose your business a lot of money, without knowing why cash flow is so poor. Financial management starts with monitoring the revenue your business makes and monitoring all invoices will ensure you can successfully manage your business without any issues. This can also give you the data you need for future reference to payments made by your customers.
Create A Financial Plan
Financial management will always include planning ahead and you should consider creating a financial plan for your business. Using a cash flow forecast could also give you the opportunity to see how you expect your business to perform in comparison to the actual figures you achieve. Cash flow forecasts created by our team will give you an accurate representation of how you should expect to perform over a certain period of time.
Creating an achievable and accurate plan may not ensure you meet those objectives but allows you to put something in place to meet your expectations. By planning ahead, you can manage your finances closely to see how these goals can be achieved and what your business must do. Creating a plan means managing your current finances closely as well as the ongoing transactions that occur in your business.
Record All Expenses
Bookkeeping is vital for every business. You never know when data from the past may need to be used and by recording all financial details, finances can be managed better. All transactions and every outgoing should be recorded, whether this is for personal use or payments to the HMRC.
All tax records must be kept for at least 5 years after they have been submitted for the relevant tax year. This means if you no longer require all business records, you are required by law to keep them. Additionally, when making tax payments, calculating your tax return becomes a lot easier when you have the exact figures available. Without bookkeeping, calculating taxes can become very difficult and managing your finances whilst submitting taxes could lead to higher or lower payments than necessary.
To avoid fines from the HMRC, you should effectively keep a record of business revenue and expenditure to ensure all tax forms can be filled out correctly.