Keeping Your Finances on Track When Scaling Your Business
If you have a business that’s growing rapidly, it can be very easy to get a little bit overwhelmed by the rapid changes. Scaling up to match business growth needs to include a close monitoring of your finances, because things can get out of hand very quickly if you don’t. Here are some recommendations on how you can keep track of your finances during a period of growth.
Make time for monthly financial reviews
Don’t make the mistake of thinking that you understand how things are going. Make it a point to set aside time at the end of every month to take a close look at bookkeeping, so you’re sure where you stand. If you keep track of the information shown on your profit and loss statement, cash flow statement, and balance sheets, you should have a good idea of what’s going on.
Formalize accounting with software
Hand-kept accounting might have been adequate for small businesses decades ago, but precision and clarity are essential in today’s business world, and that means your accounting should be committed to a really good software product. Fewer mistakes will be made, and it will be a lot easier to produce the business documents crucial for running your operation.
Update your business plan
With market changes and other changes occurring almost daily in business, long-term planning can be overturned fairly quickly. The components of a business plan you developed two or three years ago may be completely outdated by now. Review and update your business plan periodically to account for any new trends or shifts in the market.
Protect and backup your data
Business data is critical to daily operation and long-term success. You need to protect your data with a good security system, and have it backed up regularly, in case you need to restore data from a specific date.
Set aside tax money regularly
Don’t get walloped at the end of a business year with the need to come up with a large amount of money to pay for business taxes. Set aside money throughout the year, a little at a time, so your business doesn’t suffer and so you can be building toward that payout at the end. It’s a necessary evil, but you can’t bury your head in the sand about it, and expect that the taxman will just go away.
For more assistance with everything needed for scaling your business, contact Anmarc Business Capital at 410-995-8925 today.