An integral part of running a business is establishing sound financial procedures and systems so you can monitor the overall financial health of the enterprise, as well as ensure that you continue to meet your tax obligations.
Set up a business bank account
Keeping your business finances separate from your personal finances enables business owners to monitor their income and expenses, and allows them to easily extract business records for taxation purposes.
Create a budget
Setting a realistic budget can help you meet your financial goals. Realistic budgets can help owners understand their current situation and make projections.
Establish an accounting system
Good business records can assist when applying for finance, reviewing business activities and managing and complying with tax requirements. All businesses are legally required to keep records related to their income, GST, employee payments, superannuation, FBT, fuel tax credits and business payments.
Review your accounts
It is a good practice to review your business’s financial statements at least once a month so you can identify problems and put strategies in place to fix them.
Create procedures for providing credit and collecting outstanding debts
Creating policies and procedures relating to invoicing, payments and terms and conditions for providing goods and/or services can help a business manage credit effectively, maintain good cash flow and have minimal exposure to debt.