Getting your head around effective financial management, when you are busy running a business can be difficult. Get it wrong, and you could end up failing before you really get started.

Here are five key factors to consider:

1) Make a plan – With the help of a planner or accountant, make a plan for spending and tracking your finances. As your business grows, review everything – profits and losses, outstanding accounts, payroll expenses – regularly.

2) Cash flow is key – Tracking incoming and outgoing cash helps you stay in control of your cash flow and gain insight into trends over time. Small adjustments – like changing invoicing dates or reducing stored inventory – can help you prevent fluctuations in cash flow.

3) Keep an eye on debt – Borrowing isn’t necessarily a bad thing, but it’s essential to keep tabs on your debt – making payments regularly, changing lenders as needed, and ensuring that the benefits outweigh the costs. On the client-side, keep an eye on unpaid invoices and chase down the money you’re owed.

4) Take on large clients with care – Growth is great, but it needs to be manageable. Before you bid for that huge new contract, work out how you’re going to manage the actual work without straining your current setup.

5) Smart money management – Seemingly small decisions – such as setting margins on your products or picking a provider for your internet service – can add up over time. Don’t settle for the obvious choice: experiment with different pricing structures, look for new providers and negotiate rates – every small saving makes a difference.

Successful money management isn’t about the specific decisions you make, it’s about the thought you put in and the knowledge you gain.

Our financial management can help you get it right.