How to Monitor Finances in Your Business
Owning a small business can be tough, especially when it comes to monitoring your finances. On top of this, the ongoing Covid-19 crisis has had a huge economic impact, leaving a lot of small business struggling for survival. Monitoring your finances is one of the keys to success,ensuring that you know exactly what your money is being spent on and that you’re careful not to overspend. Here are some tips on how to monitor finances in your businesses.
Make a note of everything that is spent
One of the most basic methods of helping you keep track of your business’ finances is to make a note of everything that is being spent. Whilst larger businesses may have Finance departments to help with this, as a small business, you may not.
Set up a master spreadsheet every financial year that details everything that is being spent, and make sure you assign each purchase its separate purchase order number to make it easier to filter. You could also set up additional spreadsheets for separate projects to make sure that you don’t go over the allotted budget for that project. Having master spreadsheets such as these makes it easier for you to keep track of your finances and identify when and where there is overspending.
Monitor call costs with Amazon Chime
Part of your business expenditure no doubt goes on utility bills that are difficult to track and quantify, but are no less essential to your business. For instance, using the telephone to speak to customers is not something that should be cut short to save on your phone bill, or you could risk damaging your customer service satisfaction.
What you can do, however, is to use a communications service like Amazon Chime, a communications service that allows you to place calls both inside and outside your business with a single application. You can then use analytics, such as that available on codesoftware.net, to monitor call costs, to identify when cost saving methods could be realized, and highlighting potential abuse. This means that one worker who constantly uses your company phone to make personal calls will soon be found out!
Manage your cash flow
Every business has a client who is consistently late in paying invoices. It could be that their payment terms are slightly behind your own, or they might simply leave payment to the last minute. Whatever the reason, too much cash tied up in unpaid invoices can lead to financial problems, and in many worst case scenarios, it is the main cause of a business’ failure.
It’s therefore important that your business manages its daily cash flow to ensure that you are operating at a healthy level. There are many solutions for dealing with a chronic later payer other than repeated invoices and phone calls. You could, for instance, charge late fees as a deterrent, or, at the opposite end, offer a small discount off the sum of their bill for an early payment.