It’s best to establish a system to track the flow of cash, such as accounting software that tracks transactions in real time. If a spreadsheet or manual system works efficiently for you, that’s great too.
However if you're at a very early stage of your business, or haven’t started yet, one of the first tasks you should do is separate out your personal and business expenses. This will make your business finances easier to manage and will set you up for success.
If you’re a new business, it’s important to check not only sales, but also expenses, especially when more and more costs are through online subscriptions or direct debits.
It’s important that your tracking process can monitor:
- whether sales have been stable, are on target for growth, or have flattened out. If there’s a seasonal impact, then it’s important to develop tactics to smooth out the drop and make the most of peak times
- which products or services are the most popular? Seek to promote and focus on these and consider dropping those that don’t sell as well
- which expenses are costing the most, and to decide if they’re all necessary. How can you reduce any initial expenses while maintaining the quality you offer?
It’s a great idea to get help to analyse what’s going on, especially if your business is in its early stages. Your accountant is a smart option, and NAB offers support through its business bankers too. Get in touch with us to discuss your cash flow circumstances.