As a business, how you look after your business finances will determine how much success you have over the course of your company’s lifetime. Your financial health plays a big part in the opportunities your business has and how it manages the tougher times accordingly.
The pandemic was just one example of a make-or-break situation for businesses. As a result of the losses, many companies had to close their stores and businesses for good.
Those who survived were savvy with their finances or had plenty of cash reserves to survive these troubling times. It’s important that your business does everything possible to ensure healthy finances all year round so that the company can continue to grow and thrive.
Here are some helpful tips to keep your business finances healthy as a business for 2024 and beyond.
Look at your budgets and adjust accordingly
When trying to keep your finances in check, consider how you manage your budgets, what these look like, and how you might need to adjust them as time passes.
Not all businesses have the experience and financial knowledge that some do, and it’s therefore imperative that you learn what you can about good financial health for your own business.
Consider taking any courses that might help you understand your business finances, especially if you’re a small business and can’t afford to hire more staff or outsource right now. Once you’ve identified the areas of concern in your budget, adjust it according to what needs changing.
You might want to check in with the departments to see where these budget cuts or changes might impact their own spending. Of course, you don’t want to impair their efforts for the business by reducing costs, but some changes might be unavoidable in order to keep the funds healthy.
Stop unnecessary spending and communicate with departments
There can often be a lot of unnecessary spending within a business, and that’s something to be mindful of when you’re starting up a business on a limited budget. Even when you’ve started to create a successful business with an income to show for it, you mustn’t be going too overboard.
Unnecessary spending can appear in different forms. From the food and drinks you offer to clients or internal staff for entertainment purposes to weekly flowers in the reception area. These expenditures can certainly be cut, especially when your business finances might struggle to rub two coins together.
Again, it’s important to communicate with departments. Understanding what they are spending and what they need to spend is different from what they can afford to lose from their budget.
Speaking to departments is going to be helpful in avoiding the rug being pulled from under them. At least these discussions can help soften the blow and potentially help
Monitor cash flow for any problem areas
You should monitor cash flow closely, especially when you want to keep things healthy financially.
With cash flow, it’s important to ensure the books are balanced and that you’re getting just as much income, if not more, than the company’s outgoings. When your outgoings start to overshadow your income, that’s when you could get your business finances into trouble.
Look at your cash flow, and if it’s not doing well, then it’s time to make some actionable changes quickly. Problems with cash flow can typically stem from overspending, but you might also want to look at how efficiently invoices are being paid and whether that might be impacting the level of cash flow coming in.
Some clients or customers might be sticklers for not paying on time, so it’s always good to try to put processes in place to ensure they pay up on time.
Create an emergency fund
An emergency fund is there in case the worst should happen, like another pandemic or an economic crash that impacts the spending habits of your customers or clients.
Emergency funds are helpful to have in place whether you’re a business or simply looking to improve your financial situation. These rainy-day funds really do give you peace of mind that should anything go wrong, you’re covered.
Look at what you have in the way of cash reserves right now. You should always save some money in your business emergency fund and only use it when you need financial help.
Otherwise, it can tick along in the background and, hopefully, be drawn out if in excess at a later point and used accordingly for the company’s and employees’ benefit.
Make use of technology to improve finance processes
Technology has become widely popular, and many businesses are looking to use it to improve their financial processes. From automating invoice distributions to using QuickBooks Stripe connector for easy payment processing. There are plenty of apps and software to use for your business.
Technology has advanced significantly in the last decade, and businesses operating in this digital and modern age should be taking advantage of it.
Check overhead costs and find comparables when required
Overhead costs are often something you can’t avoid; for the most part, they’ll need to be paid out monthly. However, there are certainly some savings that can be made when it comes to business overheads.
It’s easy enough to just stick with the same company in the hopes that it will be less of a headache. However, it’s something that you should be actively looking to do as it will save you some money both in the short-term and long-term.
Look at what utility providers you currently have and what charges have been creeping up. It might be worth having a quarterly or annual reminder to check these utility bills and change them where required.
Being active and finding comparables for your energy bills can be a great way to save money for your business, which can be used elsewhere for more productive opportunities.
Buy energy-saving and energy-efficient office equipment
The equipment you purchase as a business is important, and there are plenty of options nowadays that can be both energy-saving and energy-efficient. As a business, it’s important to be proactive in using less energy and keeping your carbon emissions as low as possible.
Look at how your equipment performs across the office and business premises generally. You might find that you need to replace some equipment because it’s using up more energy than necessary.
Consider what needs investing in and how alternative/renewable energies might be worth investigating for the company’s future business finances.
Automate tasks to improve efficiency and cut down workloads
Automating tasks around your business is a great way to improve efficiency and reduce workloads. Therefore, it’s important to look at how you can automate your efforts to help improve that efficiency in the workplace where it’s needed.
A good way to ensure this happens is by talking to your employees and understanding where the pain points are within the business. Only then can you understand what is needed to help business operations and how that can benefit your business finances specifically?
Your finance team will probably greatly benefit from the automation options available through various software and tools.
Do a financial audit
A financial audit is helpful because it can highlight and pinpoint any problem areas within the business. Financial audits are not organized to purposely trip anyone up. They ensure everything is being done legitimately and legally and identify where improvements can be made.
How your business finances are handled might not be the ideal outcome you’d want for your business, and therefore, these audits can be useful in making improvements where required.
Financial audits can be randomly imposed, but you can also get them done yourself outside of these random occasions if you’re looking to make imminent changes to your financial habits as a business.
Balance your risks to avoid any potential disasters
Balancing risks is important because too many can spell disaster for the business. You must keep the ratio of risk-taking to a happy medium. When some risks seem too good to be true or too risky to claw back from as a company, you should trust that gut feeling.
Balancing risks will help avoid potential disasters and ensure your business survives another day. While some risks might seem like a sure-win, that is not always the case.
Keeping your business finances healthy is an important part of running a business, so it’s essential that you do what you can to improve them this year and every year so that your company can survive and thrive.