Managing the finances of your startup may seem challenging, and most times is, but it is a very important part of your business. If you can project where your business is headed by knowing exactly how your revenue and expenses are stacking up, you can begin to make more informed decisions for your business.
You sure don’t want to end up being a failure at running a business. So, it’s time to get your finances in order.
Here are tips to make it work:
1. Keep business finances separate from personal ones
This should be #1 on your to-do-list when it comes to putting your business finances in order. That flowing dinner dress you saw on Instagram and bought was a personal expense, but your business debit card was handy so you used it. Sure, you can sort out these expenditures later, but mixing your personal and business finances may not turn out well in the end.
To be successful in business, you need to make transactions less complicated by tracking your key performance indicators. Cash flow, revenue, expenses, profit, and loss reports are some of the elements you need.
2. Plan ahead
One of the major objectives for any startup is to make profit and this needs some good planning. Begin by monitoring your finances and projecting future revenue and expenses, as it will enable you to make better long-term decisions for your business.
If you aren’t looking at the future of your business, you could be taken by surprise. But by making future plans, you’ll be able to mitigate unwanted surprises. Even if unexpected expenses do rise, if you’ve been practicing conservatism in your spending, you shouldn’t run into any major problems.
3. Know your tax responsibilities
Tax responsibilities vary and they are dependent on the kind of business you run. In Nigeria, there are several types of tax payments for businesses. There’s also PAYE for employees, and many others you need to be aware of. Get to know about them, so you won’t be defaulting and jeopardizing your business.
Ensure you consult with the FIRS, the body in charge of revenue and tax-collection in Nigeria. It’s also a good idea to consult with an accountant.
4. Have a budget
Part of staying organized and planning ahead should include creating a budget, as not doing this can mess with your cash flow. Also, you may lose track of your expenditures and mix up valuable transactions.
The importance of a budget is equal to the value of a well-formed business plan. Make a budget and use it as your guide to clear-headed decisions. Whether it’s in improving on your marketing spend or cutting administrative costs, a budget will keep you on track.
5. Hire an Accountant
Accountants should be your allies, if you must keep your records clean as a business owner. Their knowledge of the profession and tax laws will save you money almost every time. It might be tempting to want to save money and do it yourself, but it’s almost never more cost-efficient in the end.
An accountant will almost always find more deductions, keep your business penalty-free and save you time.
Did you find these tips helpful? Let us know in the comments!