During financial literacy month, people are encouraged to review their finances. Doing so provides an opportunity for individuals and businesses to reassess their finances and see where things may be able to change. You may be thinking, “But I don’t even know how to manage my finances, much less my business’ finances!” That’s okay! Bigger Brains can help power productivity with five tips to improve your firm’s finances.
Make an Annual Budget
No matter what kind of business you run, it is always a good idea to make an annual budget at the beginning of every fiscal year. Solidifying a yearly budget can help keep yourself accountable throughout the year. On the contrary, when businesses work based on monthly budgets, spending can increase depending on trends at the time.
Having an annual budget encourages company leaders to think through their decisions ahead of time. Doing so provides a sense of confidence and premeditation in business decisions. Instead of rushing into new changes depending on the month, planning out the year can help businesses make goals and hold to them.
To help you make these types of decisions, you need to have a certain amount of Data Literacy. Knowing about the data and understanding what it is telling you will help you make better decisions for the future. Intro to Data Literacy, a Bigger Brains course, will introduce you to the subject!
Separate Fixed vs. Variable Expenses
Similar to planning an annual budget, separating fixed expenses from variable expenses can help determine how much your business accurately spends in a month. One way to do this is to break down any fixed costs at the beginning of each month. As the month progresses, write down any variable expenses that occur.
An example of a fixed expense could be any of the following; bills, subscriptions, salaries, or rent. An example of a variable expense could range from delivery costs and commissions to credit card fees and raw materials.
Utilize Finance Tools
While sorting through your business finances on your own may be the less expensive route, it may not be the easiest. Some people have a hard time understanding the differences between debits and credits, and those misunderstandings can lead to significant financial problems for your business. Instead of trying to survive financial literacy month on your own, why not let someone else work on the nitty-gritty details.
Take a bit of time to learn the basics and the terminology with the Bigger Brains Basic Business Finance course. This will put you on firmer ground as you work your way through budgeting and the next course, Basic Business Finances.
One financial tool that can ease your business financial life is QuickBooks. This software allows users to set up vendors, pay bills, and manage purchase orders all in one place! Additionally, QuickBooks allows for managing customers, products, and services in one easy-to-control area. Don’t wait any longer if you want to make your business financial life more manageable! Check out the Bigger Brains course, Mastering QuickBooks Online – Basics (2021)!
Keep Finances Paperless
One of the added benefits of financial tools like QuickBooks is that they digitally keep your financial records. Accidents happen all the time. Paperwork gets moved or thrown away because other people don’t realize its importance. You can easily avoid these miscommunications by transitioning from filing paperwork in person to going paperless.
Going paperless reduces misplacing essential items, but it will also reduce clutter and clear storage space! Instead of physically storing every critical document for the month, you could use that space for other things. Reducing the number of things you have covering your desk or filling your drawers can help clear your mind of unnecessary stress.
Automate Bill Payments
One final tip for improving your business finances this month is to automate bill payments. If you have a steady stream of income and can afford to automate bills, it will save you time and energy in the future. Having one less thing to worry about each month will allow you to pursue business growth instead of making sure every bill is paid on time.