No business owner likes being strapped for cash but how many times do you find yourself struggling to pay up necessary bills. Even more commonly, how many times do you find yourself asking “where did all the money I made this week disappear to”? Let me tell you, you are not alone. In fact, 42% of small business owners say that handling cash flow is exhausting, that’s almost half.
So, how can you make sure you can pay your bills, Expense Management, stock up, pay your staff, pay yourself and manage all other Expenses without running down? Let’s go over some solid tips.
Separate your bank and personal finances
We sometimes sound like a broken record with how often we hammer this point. It’s mostly because if at this time you use the same bank account and cards for your business and personal finances, we are sorry for you.
It makes it hard not just to Manage expenses but to track profit. Mixing both finances can lead to disorganized records, which would make you not just overspend but miss growth opportunities. It is difficult to do Small business Expense Management such as track withdrawn and deposited FUNDS when everything is combined, making it even harder to monitor expenses.
There are simply no upsides to keeping your personal and business funds in one place. Please detest.
Record your expenses in real-time
You eat when you are hungry and take a bath when you feel dirty, so you should record your expenses immediately it happens. You can do this easily with any accounting app on your phone. Using your Kippa Expense Management Software For Small Businesses, You can record & Manage Expenses on the go.
Then you will have a clear picture of your spending and will be able to determine which of your expenses generates the biggest return on investment.
You can use this data to cut costs where necessary and focus more on profit-generating efforts.
Time all your expenses
There are a few things more embarrassing than when it’s time to pay for recurring payments like salaries or electricity bills and you can’t afford it because you’ve used all your cash to stock up a full shop or make a solid investment. Don’t get me wrong, you should stock up and there are some solid one-time investments but to avoid instances of low cash flow, you need to time your purchases.
Don’t make unnecessary purchases or financial commitments until you have paid your recurring bills. And, wait until you have enough cash on hand to cover new expenses.
Keep track of deadlines
If we are keeping it 100%, some deadlines are more important than others. In this case, the most important deadlines are deadlines that are enforced by external parties and have to deal with money.
Paying your debts, business loans, or credit card payments on time might not be possible if you don't know when your bills are due. And if you don’t know when they are due, you may have to pay back with late fees, extra interests, reduced credit rating, or just a vendor who won’t be giving you access to credits ever again.
To stay on top of your deadlines, record when payments are due, set reminders on your phone, and get on a consistent payment schedule.
Keep an eye on your inventory
The last time you restocked your entire store, were all of the purchases necessary, or did you just order items routinely and now they just collect dust in your store? Or, are you always running out of the most wanted items causing you to say no to customers?
The only way to get out of this problem is to Manage Expenses with Kippa. Your small business can Manage Expenses better if you improve the way you Manage Expenses. Record all the items you have in stock so that you never have too much inventory or not enough.
When you are going out or calling your supplier to restock the items in your store, be sure to open up the product section of your Kippa App to check when you have in stock, what item your customers love and what items to take off your list.
Create a budget
To do Expense Management, you must create a realistic business budget you can stick to. Using this budget, you will be able to monitor your performance and adjust it as needed. Creating and maintaining a small business Financial Plan can simplify Expense Management, help you set revenue goals, and help Manage Expenses your spending.
For you to create a realistic business Financial Plan, you must first determine your income, then determine your costs, and finally determine your profit. This will give you a clear view of how much you can spend and make sure you don't go overboard with spending.
Your business budget should be reviewed and updated regularly; an outdated budget is no good.
Monitor your finances weekly
It’s not enough to use put all these tips to practice if you are not monitoring your finances closely. Your Kippa profit analysis feature is not just a placeholder in the app. Download the profit analysis and track just how much profit you are making and what expenses have you on a chokehold.
It’s free and it gives you a chance to catch any unnecessary expenses quickly.
Managing your business expenses so early on in your business may not be the easiest thing but if you wait any longer, there might be no business left for you to manage.