4 Tips To Manage Business Finances Weekly
For business owners and managers, accounting tasks are not always a favourite when other items on their to-do list seem far more pressing! That is until the long-overdue financials rear their ugly head and the administrative catch-up task leaves you wanting to pull your hair out. Maintaining your business’s (or even home financials) on a weekly basis goes a long way to ensure that your bookkeeping is kept up-to-date and is a major component in avoiding the month-end (or year-end) headache! Below we talk about 4 simple tasks to do weekly that will take the sting out of your financial administration.
Start the week with a quick cash flow forecast
Start your week with a quick look at your ageing accounts payable and receivable. This will go a long way in helping you have a snapshot of the cash flow picture of the coming week. If you notice any issues you can be proactive and push for prompt debtor payment or ask for a small delay on accounts payable items. It really helps to be prepared instead of being on the back foot and getting an unwelcome surprise in the middle of the week.
Keep a paper or digital trail
We’ve all heard the old adage “the devil is in the detail” and in the case of a paper trail in accounts, this holds especially true! It is even more important in the case of a small business, where there is no dedicated accounts department, to keep track of expenses, receipts, and invoices regularly. Whether it be office stationery, raw materials, or postage costs-by keeping all the receipts and documentation, or simply taking a picture of it with your smart device, you have a clear record for the end of the week to reconcile and record your business costs that week.
Invoice your clients
In a Forbes article, John Rampton, founder of online payments company Due, said, “We’ve actually found that when you invoice the same day that the job is completed (as opposed to waiting two-plus weeks for your billing cycle) you are almost 1.5 [times] more likely to get paid.” If you don’t invoice, you don’t get paid! Delaying your invoice leads to delays in your cash flow and also does not give your customer a great impression. A prompt invoice shows a business on top and in charge of its affairs. What’s more, invoicing your client promptly for the products or services you provided while it is still fresh in their mind means that if there are any discrepancies or queries regarding the invoice, they can be discussed promptly and not a month (or more!) after the fact.
Reconcile before the weekend
Don’t procrastinate. Now that the week is done and you have kept track of your expenses and sent out your invoices, it is the ideal time to do one last weekly step before you head off for your weekend.
Reconcile. Your business transactions of the week need to be reconciled with the movements of your bank account, and this is usually done via an automatic import of your weekly bank statement into whatever accounting software you are using. This simple step of reconciling a handful of transactions in and out of your account weekly, versus trying to deal with a whole myriad of them at the end of the month is not to be underestimated!
Keeping your business accounts squeaky clean and up-to-date needn’t be a monthly laborious task. By using some of these simple steps, you can save yourself the stress of the “last-minute dash” to month-end, and make keeping your accounts accurate and current, far less of an administrative headache.