It’s no overstatement to say that SMEs are abundant in Singapore and they are thriving well. This can be attributed to the fact that incorporating a company in the country is relatively easy and simplified, thanks to a number of incorporation services that streamline the process.
And on top of that, an appealing tax system and the government’s success-promoting policies make it all the more appealing. But despite all these ideal conditions, there’s still a chance for a company to fail, and it all comes down to one crucial factor: improper money management.
Your hard work and effort may go down the drain if you are unable to stay on top of your business finances and ensure optimal cash flow. Work smarter with these 3 strategies to help improve money management for your business.
1. Be timely with the accounts payable
On the uphill road to success, generating satisfactory sales and revenue is only one of many factors that business owners need to do to keep going. To stay afloat, proper attention must be paid towards the timely payments of the business’ debts, be it towards its suppliers or loan providers.
These debts are accrued because of the need for sufficient capital and other business operation requirements. As a result, the average business, more often than not, runs on minimal profit margins during its early stages.
Due to this, it may be tempting for some business owners to skip payments now and then for the improvement of their business. But this move will always be inadvisable since late fees and penalties may be imposed upon them, further impacting the business’ delicate finances.
2. Curtail unnecessary expenditures
Despite being seemingly obvious from the outset, it’s still necessary to reiterate the importance of frugality when a business is still in its infancy. This is because some entrepreneurs only take heed of this advice superficially. It’s crucial to think about what’s necessary to keep the business running and what isn’t. For example, will the incorporation of a new technology revolutionise the business’ earnings? Or is a certain department offering enough to justify its staff overhead? Every cent counts – these little savings gradually add up and do wonders to the company’s bottom line.
Stay on top of your financial transactions and expenses with comprehensive accounting services. This way you will gain a more accurate picture of your business standing and know what you’re spending on and how much sales are coming in. You will also benefit from engaging audit services that provide timely financial reporting to guide you in making sound business decisions. Work with the best audit firm to understand your requirements and meet your needs. At Ackenting Group, we have a suite of corporate financial services at your disposal, so you can spend less time on the small details and focus more on your business’ growth.
3. Maintain and improve a cash flow budget
No matter how much profit a company may earn, experiencing a cash crisis still remains possible. Thus, maintaining a cash flow budget is necessary to ensure that funds will always be ready when needed. A cash flow budget simply details the expenditures that are expected for a specific period in the business’ lifeline.
By maintaining this budget, business owners can create a forecast of their future incomes and expenses based on estimates backed by past data. Through this careful process of tracking funds and comparing forecasts with actual results, business owners can expect how much is needed for the future and prepare accordingly for it.
Conclusion
By managing the business’ finances properly, business owners will have less to worry about and can rest easy knowing that their venture is still on course to success. Use these tips to help you work smarter and complement your efforts in growing your business.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
