As April 15 looms ever closer, your mind (like mine) may be on taxes and finances. Last year was a very busy year for me- between getting married, buying a house, and keeping my consulting practice going- so my paperwork and financial management suffered a bit. I spent about an hour today looking for bank statements and getting everything in order to do my yearly analysis.
I bring this up because I found that the busyness of last year had a negative impact on my business systems, and, as a result, on my understanding of my business finances.
Aside from the one-time costs of getting married, I also had less time to market and less energy available to work with clients, all of which have probably impacted my bottom line.
With a new year, though, I’ve resolved to get back on track, and that’s what I want to focus on today: your systems for keeping your business cash flow positive and steadily growing. No time like the present, right?
Here are a few of my suggestions:
- Create structures which are easy to follow. I, for instance, make a habit of entering my business receipts & expenses into my computer software (Quicken) once a month. I do this on the 3rd Friday of every month, and that’s scheduled in all through the year. This gives me a chance to assess my expenses and earnings and make adjustments as needed.
- I keep a small box in my car and have trained myself to put all my receipts into it, just after purchase. It is a useful way to keep the receipts available, both for tax purposes, but, also, if I ever need to return an item.
- I have added important tax dates to my planner and set up audible reminders on my computer so I can pay on time, avoiding penalties.
- I have set up automatic bill payment for my standard business expenses.
- I monitor accounts receivable and take direct action if I’m owed money which I’ve not received.
- I have well defined, regularly planned increases in my consulting rates, and I communicate these with my clients.
- I track my sales and marketing efforts and their results.
- I invest a portion of my profits directly back into my business.
- Finally, I seek out business by referral, as this keeps my costs of client acquisition low, and my profitability high.
If you’re looking to implement some better financial systems in your business, now is a good time to start. While tracking your finances is not strictly a sales or marketing strategy, awareness and attention to your finances will help you understand where your money comes from, and where your money goes: useful for determining if your business is functioning as well as it could be.
