Managing Finances For A Small Business – 10 Top Tips

Managing Finances For A Small Business Can Be A Challenging Task, But It Is Essential To The Success And Growth Of Your Company.

From keeping accurate financial records to creating a budget, understanding cash flow and managing debt, there are many aspects to consider. This guide aims to provide an overview of the key financial considerations for small business owners and offer practical tips for managing and understanding your small business finances.

1. Keep Accurate Financial Records:

   • Make sure to keep track of all your income and expenses, including receipts and invoices.🧾
   • This will help you understand the financial health of your business and make informed decisions.
   • Accounting software such as Xero  or Quickbooks can help you with this and keep you compliant with Making Tax Digital at the same time 😉

2. Create A Budget:

   • A budget will help you plan for future expenses and income, and ensure that you have enough money to cover your expenses.
   • It will also help you identify areas where you may be overspending.📈

3. Understand Your Cash Flow:

   • Cash flow is the movement of money in and out of your business.
   • It is important to keep track of your cash flow, so that you can identify any potential problems and take steps to address them.
   • Check out our video on Cashflow Management for a Small Business on YouTube 🎥

4. Manage Your Debt:

   • If you have debt, make sure to keep it under control.
   • Make sure to pay your bills on time and avoid taking on too much debt.
   • As you will have seen in the cashflow management video above, so long as you have a really good handle on your numbers and communicate with suppliers, the bank, or HMRC in advance, most will be happy to support you through a short term cashflow crisis.
   • For more guidance on working with HMRC to arrange a Time to Pay agreement, see our video and associated article on this subject.

5. Plan For Taxes:

   • Make sure to set aside money for taxes, so that you are not caught off guard when it’s time to pay.
   • To understand how much tax a limited company pays in 2025, read our article here.
   • Or to understand the changes to limited company corporation tax which came into effect in 2023, see our video on the subject here: UK Corporation Tax from 2023 Explained

6. Seek Professional Advice:

   • If you’re unsure about any aspect of managing finances for a small business, consider seeking advice from a professional accountant or financial advisor.
   • The IN Team would love to help you and are always available for a no obligation chat – simply fill in the contact us form, send us an email, or schedule a call and we look forward to hearing from you😊

7. Stay On Top Of Expenses:

   • Keep an eye on expenses and make sure that they are reasonable and necessary.
   • If you see any areas where you can cut costs, make sure to do so.
   • Use a third party app such as Dext to scan your receipts straight to your accounting software and be sure not to miss claiming for any 😊

8. Keep Your Books Up To Date:

   • Make sure to regularly update your financial records, so that you always have an accurate picture of your business’s financial health.
   • See all the points above about software, budgets, cashflow etc etc
   • Make sure you have a business bank account, and do your best to keep your business and personal finances separate! See our article on choosing the best bank account for your small business here.

9. Be Prepared For Unexpected Events:

   • Unexpected events such as natural disasters or economic downturns can have a significant impact on your business.
   • Make sure to have a plan in place to deal with such events.

10. Continuously Monitor And Evaluate Your Finances:

    • Regularly review your financial performance and take action to improve it. This can help to ensure the long-term success of your business.

Overall, managing finances for a small business requires a combination of good record keeping, budgeting, and a solid understanding of cash flow and debt management.

It is also important to seek professional advice when needed, and to be prepared for unexpected events. By following these guidelines and regularly monitoring and evaluating your finances, you will be in a better position to make informed decisions that will help ensure the long-term success of your business.

Remember that managing your finances takes time, effort and patience, but it is worth it in the long run.

If you would like any external support with managing finances for a small business, please do contact us, and one of the IN Accountancy team will be very happy to help!

For more accounting, finance, tax and business growth top tips check out our YouTube Channel here