Financial management: how to control your business

by Aaa Cas Auditors & Business Consultant in Dubai

We know that day-to-day things get complicated, and the rush often ends up preventing you from keeping control of your finances in a systemic and organized way.

 

Thinking about this difficulty, we created this post to give you some tips on how to keep an organized routine and control your finances. In addition, we've also listed some common mistakes you should avoid in managing your business financially.

 

6 tips to make financial control more efficient

 

Check out the 6 valuable tips that we have separated for you to organize your company's financial routine, check it out:

 

1 – Cash flow control

 

The cash flow is the essential part of your Finance Company, and can be quite simple. A little organization is enough for you to write down all the cash inflows and withdrawals from the company.

 

The first thing to do is write down all outputs, such as suppliers, rent expenses, electricity bills, internet, among others. In the entries, you must record all your sales or services rendered, it is ideal to do this procedure every day.

 

2 – Accounts payable and receivable management

 

Manage everything that must be paid, register accounts in advance so you don't end up forgetting to make a payment by the deadline, avoiding fines and interest.

 

In addition to the importance of accounts payable, you should also be aware of receipts. Controlling how much the company has to receive from customers can help in cases of default.

 

3 – Bank Conference

 

Banking control has two important objectives, the first is to compare the company's records with the entries computed by the bank and the second is to generate daily reports on the balance. This is critical for managing accounts payable.

 

4 – Billing Control

 

Billing is the total value of sales or services provided, added up in a given period, that is, it is all the money that enters the company. To do this control you must take all the entries' records and add them up to have daily, monthly or yearly control. Here, you can see the importance of an organized cash flow record.

 

5 – Audit and monthly closing

 

The guarantee of the financial health of your business comes through a well-organized accounting work. The audit reviews and assesses the finances with the objective of ensuring the fidelity of the records, providing credibility to the financial reports.

 

It is necessary to carry out a monthly detailed closing involving cash flow, inventory , billing and accounts payable and receivable. In addition, it is important to work the closing together with your accounting and include in the report all charges such as taxes and duties paid. Thus, it is possible to generate reports and balance sheets for further analysis of your business.

 

6 – Online management system

Using an online management system brings agility to your daily life. Making the records of sales, inventory movement, issuing invoices , accounts payable, in an automated and integrated way, will save your time and, furthermore, minimize the possible errors that can occur when doing all this manually.

 

Financial planning

 

Financial planning is a projection of income and expenses based on the economic history of the business and are normally carried out at the end of each year with the aim of indicating the company's financial situation for the next year.

 

Read also: Auditors in Dubai

Make the annual balance to be able to schedule the business finances for the next year, so you are already prepared for possible problems and different situations that can hinder your business.

 

It is recommended to ask your accountant for help in preparing the plan, as he will be able to assist you in analyzing the financial situation as a whole and in a more in-depth manner.

 

How to do financial planning?

 

Following a financial plan helps the entrepreneur to plan and assists in projecting expenses and income.

 

The Five Mistakes That Affect Your Business

 

1. Failure to properly record your business' financial information. Some of them do not have exact information about the cash balance, inventory value, accounts payable and receivable and what are the fixed expenses, in addition to the amounts to be paid in the short term.

 

2. Not knowing whether or not the company is making a profit in its operating activities, due to the failure to prepare an income statement. In this case, you don't know if your price is in line with the market, if it is way above or below the price of your competitors.

 

3. Not correctly calculating the sale price of the products, due to lack of knowledge of costs and expenses.

 

4. Do not separate the personal financial management of the partners from the amounts used to maintain the company. This is a common mistake and one that leads many businesses to close their doors.

 

5. Not managing the business correctly, failing to carry out the management accompanied by all stages, from the purchase and formation of stocks to the sale of products.

 

 

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Created on Oct 6th 2021 09:55. Viewed 176 times.

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