Running a small business in Australia can be expensive. You’re may be looking at spending thousands of dollars to get going; costs that will only increase as you stay in business and expand.
It’s important to have a grasp on your money from the start, so here are four tips to help you manage the financial obligations that come with running a small business.
1. Make regular cash flow projections
The latest Small Business Insights report from Xero shows that only 55 per cent of Australian small businesses were cash flow positive in March. This is a recurring problem for SMEs and needs to be managed more proactively.
It’s important to have a clear cash flow projection to help you proactively prepare for inevitable obstacles. A good report includes:
- Historical financial data;
- Prospective data;
- Sales forecasts;
- Cash-flow statement.
2. Have a good business account
Having an everyday business account and a business savings account can help keep your cash flow steady, better preparing your financial future. Not only does it act as a financial safety net for emergencies or when cash flow slows (which you can prepare for in your projection), it also helps make your business more flexible. For example, having money saved can help you get through an unpredictable economy or move into a new market.
The right business savings account will have perks including no monthly account keeping fees or unlimited transfers so you can save money for your future.
For a limited time, if you open a BOQ Everyday Business Account you will get a free Square reader as well the first $1,000 worth of transactions fee free*. With fast setup, your business will be accepting card payments in no time.
3. Understand tax obligations
If you aren’t prepared, tax time can pose a big problem for businesses. From day one, it’s important to know what your tax obligations are so you are ready to submit. The Australian Taxation Office also requires you to have all your transactions recorded in English and kept for five years.
Additionally, a recent MYOB report found that many SMEs aren’t prepared for the ‘hidden’ costs of GST. Most notably, the average small business is liable for around $6,778 of GST each year, and those who don’t have their records in order can find themselves scrambling at the last minute.
4. Use technology to help manage expenses
The aforementioned record keeping can get overwhelming, but using technology like Expensify can give your paper trails clarity. Electronic record-keeping software is an ideal way to streamline business operations, and according to the ATO, electronic records will give you the power to do things like automate reports or back up records in case there is a flood, fire or theft.
Beyond that, systems like PayPal or Apple Pay are helping businesses get ahead of late payments and get control over cash flow.
To learn more about your small business finance options, visit your local BOQ branch and talk with our team today.
*Terms and conditions apply, visit boq.com.au/square to read more.