Good money management skills are important for the long-term health and success of any business. SMEs don’t have the same leeway as large corporations, making it even more important for them to manage their money properly. Below are six tips to help SMEs manage their finances as effortlessly as possible.
1. Nominate someone to manage your accounting
Whether you use an external bookkeeper or you nominate someone to manage your accounting in-house, it’s important that everyone knows who is in charge of maintaining your business accounts and that whoever you nominate is capable of staying on top of things.
2. Keep track of your costs
Recording your expenses is one thing, but you should also review them month to month to identify areas where you can make savings. Even small savings can add up over time and make a big difference to your financial stability.
3. Choose your financing options carefully
SMEs have numerous financing options open to them today. Conventional business loans are just one of many financing options they can use. You should carefully review the available options before committing to a specific approach. For example, if you need funding to cover the cost of purchasing new equipment, leasing and asset financing are better alternatives to business loans for many SMEs. Make sure you investigate the different options available before deciding which one is right for your business.
4. Regularly review your financial projections
Clear projections are invaluable for financial planning. You should update your projections regularly so they always accurately reflect your current circumstances and your expectations for the future. Poor planning can have serious consequences for the financial stability of your business.
5. Stay on top of invoicing
You should submit invoices for goods and services as soon as possible after delivering them to the client. Make sure your clients understand your payment terms and make it clear to them when you expect payment following their receipt of invoices.
6. Review your utility costs annually
After signing up to a provider for essential utilities, it’s easy to forget about them. But you should be reviewing your utility costs at least once a year and looking for any opportunities to reduce them.
If you can stay on top of your day to day financial planning, everything else will fall into place. Don’t just record your income and expenses; spend time thinking about them and analysing them to identify areas where you can make savings.
Money management – where to find out more
Established since 1989, Tower Leasing Ltd is a funder with the support of brokerage facilities which enable companies across the UK to acquire much needed capital equipment through leasing. We create the opportunity for businesses to manage their cash flow whilst being able to secure the latest assets and technology which enables our customers to stay competitive within the market. Our services also provide the capability to deliver additional funding to support your business growth.