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Financial

Some business owners view bookkeeping as a burdensome detraction from the important work of running their business. Creating even a small amount of time in your day on a regular basis may prevent backlogged accounting from getting out of control. Use an accounting-for-businesses software package to help you stay organized. Avoid using cash; use of credit cards, debit cards or on-line bill pay options will create a paper trail you can organize later. Scan receipts and invoices as you go, so organizing later isn’t a paper-intensive project. Hire a bookkeeper or a college accounting student to help you stay on track.

Spending money appropriately actually saves you money!

The fuel costs of running a bicycle average at $0/year. The fuel costs of running a car average in excess of $2400/year. That's quite a difference but imagine how much time your car saves you. Doing the school run, rushing to work or meeting friends. These are all jobs made easier thanks to your car. As expensive as it is, it is a worthy expense. The finance of your company is much the same. Just because something is expensive, it doesn't make it unnecessary. Prioritize by importance - not by price!

Healthy cash flow is the lifeblood of your business and it depends on prompt payments. Regardless of how you set up your payment terms, invoices are often paid two weeks late so if you aim to get paid in thirty days, make your payment terms around 15 days.

You need to do more than just sending an invoice. Set expectations with your clients before you start the work. List details clearly on your invoice and send it as soon as possible to the appropriate person or department.

Always keep detailed records of inventory and time and notify your client right away if there is a potential of going over budget.

Every cent saved is every cent earned! Knowing the difference between overly thrifty and sensible and practising common sense and creativity, you will be able to avoid struggles and survive in any economic time.

Review your operating expenses regularly and find ways to lower or eliminate them such as asking for discounts, changing service providers/plans, buying in bulk and reduce usage/waste, etc. You can also explore opportunities for expense sharing such as subletting your office space, exchanging services/products with others and cross promoting similar businesses. To lower labour costs, consider hire students and interns.

If you constantly look for ways to improve your business and optimize your staff’s productivity, you will often find that your expenses decrease as well.

It’s always good to remember some financial basics as you manage your business. Having an accurate picture of your financial standing is crucial at all times. Equally important is to have a solid team of outside advisors whom you could often meet and learn from. Understand financial statements and use financial analyses to help you make the right decisions.

Take time to prepare, review and adjust your cash flow projections. Monitor and resolve issues immediately in the areas that affect cash flows such as your accounts receivable and inventory turnover. Arrange for loans and lines of credit before you need it.

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