Controlling your finances may seem a daunting task for some small business managers, but if you follow these 6 simple steps, I can guarantee you will be well on the path of controlling your business finances.

As a small business owner you may have bank accounts, emails and resources shared with your personal ones.

This may work well for a sort time, but eventually issues will occur, including not actually knowing what money the business is making, and if you are even making a profit.  Often it will look like a profit, but without the proper financial management, regular reports, and any business analysis you might simply be running a business that you are constantly propping up with your own money, and not making a profit.

Of course, controlling your personal finances is just as essential when effectively managing your small business finances, so click here for 6 easy steps for controlling your personal finances.

These steps are a framework to build a good system for keeping your personal finances under control.  A full program, including worksheets and consultations, is available.

6 Steps to Financial Control – Small Business

1a.       Review your current financial situation

  •       Print off all Financial Reports for your business
  •       Update and print all Accounts Payable, and Accounts Receivable
  •       Review & list all accounts / Loans / Bills / Debts / Incomes
  •       Ensure your financial data is integrated & kept in accordance with ATO requirements.

1b.      Budget Planner – complete the Budget Planner Spreadsheet

  •       List ALL actual incomes & expenses on a personal Budget Planner.  List exactly what the business needs to pay out every week/month on all fixed costs, and estimate of variable costs and a projection of income based on historical figures.

2.      Bank Account Separation

  • This is a most important step.
  • Your business accounts and finances MUST BE separate from your personal finances – bank accounts, credit cards – everything. no exceptions if you want accurate, legally compiled financial records for your business
  • Open separate  bank accounts  for Trading, GST, Superannuation provision, Savings

a) Trading – all business general income and expenses

b) Tax Provision (GST/PAYG) – Provision for all taxation to be held in a separate account

c) Superannuation – transfer weekly superannuation provision into a separate interest bearing account in preparation for required Superannuation Payments

  • Note: If your business cannot maintain the required balances in these accounts you need to review your business operations

3.      Automatic Payments

  • Establish automatic payments to and from each account to ensure all loan repayments, large payables, utilities and commitments are paid every week.
  • Establish automatic payments or a system to transfer the GST and PAYG into the Tax provision account, and superannuation provision into the Superannuation provision account
  • Pay yourself a wage!

4.      Reduce your Debts

  • After identifying all your debts, and setting up payments, what debts can you eliminate, reduce or combine?
  • Review suppliers, negotiate preferred supplier arrangements, review staff, review utilities.
  • Do you have separate departments? do they share resources? can they be merged?
  • Cancel Credit Cards

5.      Increase Income

  • If your commitments are more than your income, and you have reduced your debt, how can you increase your income?
  • Review mark-up / profit margins on every product or service
  • Review marketing Schedule
  • Review systems and Procedures
  • KNOW the difference between income and profit (read a definition)

6.      Celebrate & review

  • It is important that you celebrate your control.
  • Review your income, expenses, bills, and savings every 3-6 months & adjust where needed.

Contact A Girl Friday for the full comprehensive 6 step business plan, worksheets, and one-on-one consultation.