TIPS FOR SORTINGFINANCES FOR SMALLBUSINESSPaul Martin Chartered Accountant

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Ultimately, business owners want to earnmore and spend less to maximize theirbusiness profit. This is achievable if youknow how to handle your finances andfollow these simple tips.

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1. Be honest and realistic whenanalysing your finances

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Do you have enough money to sustain your operationsfor the next 3 or 6 months or the whole year? What is the status of your cashflow? Is money regularly coming in? Are you aware of your outgoings? Last year or in past years, were you spending moreand gaining less?

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Answer these questions as honestly as possiblewithout any bias. Then, analyse your businessfinances. If you are spending more and gainingless, admit it. Be realistic about your finances.Track down the problems. And once you do, focuson how to solve them.

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2. Avoid making illogicaldecisions

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People sometimes have the tendency to rationaliseillogical decisions. According to studies, if we think thatPlans A and B are good plans, we make up convenient"facts" to back up these plans neglecting all the otherthings that make these plans bad. We have an innate biasto things that we think are good decisions.

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Being biased and illogical are not good things whenit comes to dealing with your finances. Thus, toknow if your plans or decisions are logical orrational, you need to ask for advice or consult anexpert instead of assuming or relying on the "facts"that you may have conveniently created.

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3. Settle debts withHIGH interest

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Loans are good to help you get started. Butdebts with high interest are like an anchorthat will drag you and your businessdown.

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If you have debt, repay the debt with thehighest interest first and make sure tomake it a priority.

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4. Think of other ways to generatemore money

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The best way to get more money is to create anothersource.

Why not think of expanding your business? Or adding more products and services? Or creating a new business venture?

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When thinking of expanding or adding moreservices or products to your current business, talkto your trusted business advisor.

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5. Record, record, record

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Record your finances. Record everything. Keepingrecords will help you effectively manage yourfinances. It can also make your life easier when itcomes to handling your annual accounts, taxreturns and GST, among others.

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As your accountant or bookkeeper todo the recording for you.

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Contrary to popularbelief that managingfinances is a nuisance,it is actually quitestraightforward whenyou have a plan andan expert partner tohelp you.

More than just an accounting firm inAuckland, at Paul Martin CharteredAccountant we have helped many businessowners to create their business strategy andhelp them stay on track with their businessfinancial goals.

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START SORTING YOURBUSINESS FINANCES!Request an online appointment with us to get started.

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