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3 Steps to Simpler Small Business Finance

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Want to simplify your small business finance? Here are three steps anyone can take to spend less time managing your money, and more time making it!

Step One : Start managing now.

Some small businesses startup with the idea that they can “worry about money when they make some.” Occasionally, that works out perfectly. More often than not, it ends in a pile of unfiled receipts and uncontrollable hair loss every April.

The key to financial simplicity is to manage your money before you even have any. Get your accounting software setup, create file folders and bank accounts, and set policies for your finances. They don’t have to be complex – a policy as simple as “I will deposit cheques daily” or “I will file my receipts and invoices once each week” are a great way to start.

Step Two : Talk to an expert.

You wouldn’t think twice about having a used car checked by a mechanic, don’t hesitate to get the advice of an expert when setting up your company’s finances. Not only can an expert accountant help you setup the right types of accounts and systems, choose your software, and prepare reports, but they are an invaluable source of information for everyday financial situations.

Occasionally, I’ll come across a startup business who believes they can’t afford the advice of an expert. At A&A Accounting, we understand small and startup businesses. We find a flexible solution to meet the needs of your budget, and the needs of your growing organization. Don’t hesitate to call us and find out what we can do for you.

Step Three : Create a financial plan.

When you know where you’re going, it is far easier to get there. Now is the time to create a financial plan for your business. Where do you see your finances next month? In 6 months? 1 year? 10? Your calculations might not always be correct, but making them starts a conversation about money that will help you not only today, but in the months and years to come.

Sit down and write out everything you know about your business financially. What your prices and costs are, daily, weekly, monthly, and annual expenses, profit margins – anything you know about your business’ financial situation.

Then start playing with the numbers. If you cut costs in one area, do costs change in another? If you increase your investment in certain expenses, do your profits increase or decrease?

Turn these simple changes into a plan for the future. Work to save costs in certain areas, and actually lay out what the balance sheet would look like if you did. Discuss future plans, such as exit strategies/succession plans, expansion and investment now.

By following these three simple steps, you’ll be simplifying the financial future of your small business.

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