Tips on Managing Business Finances Effectively in 2019
2019 is just around the corner and since it’s a fresh new start, it’s the perfect time to make changes within your business – changes that will improve your position and propel you towards even greater success! Improving your financial position is just one incredible way of ensuring your business is running at its optimum and is working effectively and efficiently.
Often when we as owners, managers or lead personal are embedded in the day to day operations, it’s easy to let many ‘minor’ things slide. Sometimes it’s as small and simple as paying that extra $5 fee for a service, because you don’t have the time to calculate whether or not that is really what you are meant to be paying. And don’t be fooled – even $5 can start adding up! Sometimes it’s values much greater than that, and of course this causes a negative ripple effect in the business, especially if you’re completely unaware that this is where the problem lies. What we are trying to say is, that before the start of the new year, set aside a time with your team to run through the businesses financial position. Drill down into the expenses, identify ways in which you could minimize them, and look for solutions that will help you to better manage the financial operations.
If you are needing a head start in this arena, take a look at our helpful tips to managing your business finances effectively in the new year.
Consider utility management services
Just as we mentioned above, it’s easy to pay the bills you have been issued without properly understanding whether or not they are correct. For example, you could be overcharged for water and electricity for example, but you continue to pay the rates every month because you’re none the wiser as to how much it should be in comparison. Sometimes these costs are astronomical, especially if you are running a large business, but sometimes they’re astronomical because they are, in fact, wrong. That’s why it’s worth getting a utility management service to check up on your situation and investigate as to whether or not you are being charged fairly. You won’t believe how many times businesses are overcharged, and how much can be saved if this is discovered.
Budget smartly and cut back on unnecessary costs
Budgeting smartly is a no brainer, and you’re probably thinking, ‘well of course we budget smartly!’ Surprisingly, most businesses don’t budget correctly – perhaps they did in the beginning, but when things get busy and chaotic the budget is usually one of the first things to be altered – and then mismanaged and neglected (trust us, it happens). What you need to do is sit down and really focus on what your budget entails; what can be removed and added, and which unnecessary costs could be cut. It helps to take a look at your budget, instead of brushing it off because you think you know what it looks like. Saving money and working towards a stable financial position means being proactive, focused and enthusiastic to make positive changes – even when certain practices seem non-essential.
Review expenses regularly
Make it your mission in the new year to review expenses regularly. Set aside a time -whether it be every month or every quarter, to review the businesses expenses and find solutions to overspending. Many times, a business needs a service for just a certain amount of time, but carry on paying the fees even when they no longer need the service. This is usually due to mismanagement of expenses and, of course, negligence as contracts or services that are going unused are not terminated timeously. Use a contract management software to automate the management of your business contracts. Times set aside for expense reviews will give everyone in the business a good idea of where the business stands financially, which only brings positive rewards, as well as provides the opportunity to ask what is needed, what’s not, and what expenses are no longer necessary.
Keep your team small but effective
Another way to manage your business finances effectively, is by keeping things simple. If you are running a small business, it’s best to keep your team small. If you find you need to expand the skill set in your business or are in need of filling a certain role, then rather upskill your current team and broaden their responsibilities to solve your dilemma. While this helps the business financially, it also gives your team the opportunity to build on their skills and their offering. Only once the business is completely stable, financially and operationally, should you expand the team. The key is to keep the team small but effective, as this will not only save you money, but will increase the businesses revenue in the long run.