If a business is to survive and grow, it requires effective and strong financial management. So that you can achieve your business objectives, you need to monitor, organise, plan and control financial resources. By managing finances, the company will achieve long-term sustainability, use resources effectively, uphold commitments made to stakeholders and increase competitiveness.
Long-term planning should include financial management as it becomes a key process within the company. Very often, financial management may seem confusing, but many companies choose to outsource management accounting.
Regular monitoring of the business finances
Each day you should be aware of the amount of money in the business account, how much stock is on hand and the number of sales. This information will provide a snapshot of how healthy the company’s cash flow is at any time. Set targets in the business plan so that you can make comparisons on a monthly basis.
Create a business plan
By producing a business plan, you will know exactly where you are now and where you plan to be in a set amount of time. You can use the plan to decide what your business activities will be, how you will secure funding and how much you will need.
Set up a credit control process
Customers who pay late or not at all can cause so many difficulties for a company, even causing a business to fail. It’s important that you set up a process to ensure that customers always pay in a timely manner, with a procedure in place for those who don’t adhere to your payment policy.
Keep accounts
Keeping orderly business records is vital for the health of the company. Not only will you be able to keep track of income and expenditure, but you will also be able to avoid incurring penalties from HMRC for not maintaining accurate and timely records.
Tax deadlines
In addition to keeping accurate accounting records, make sure you adhere to the filing and payment deadlines set by HMRC. If you fail to make a payment or file a document before the deadline, you will incur a large penalty and may even have to pay interest on it.
Stock control
Keeping excess stock will tie up your finances. Try to maintain the correct level of stock so that you aren’t tying up money unnecessarily. Putting a system in place will ensure that you can always meet demand without having surplus stock on hand, which can cost the company money.
Financial management is crucial for your company. If you would like to discuss other ways to improve your company’s financial management, contact us to schedule an informal appointment.