Learn how you can develop successful business financial planning to ensure your startup continues to develop amidst the fast-changing market industry.
Being your own boss—and everybody else’s—entails much more than manning the team and the operations. It requires you to do everything in your power to build a business that can constantly grow and expand. Thus, any first-time business owner would benefit from effective and up-to-date business financial planning tips, straight from successful entrepreneurs—entrepreneurs who have already achieved what the first-timers are aiming for..
The goal of business financial planning is twofold: to ensure your business’s cash flow is properly managed, and to make sure that your financial transactions are monitored. The latter also includes tax planning strategies that enable you to legally reduce the taxes you would have to pay to the ATO. Staying on top of your finances through financial planning is crucial not only to your business’s growth, but also to its survival.
Here are some financial and tax planning tips to help first-time business owners get off on the right financial foot:
Segregate your finances
Consider setting up separate bank accounts for your business and personal expenses. Aside from that, ensure that your business’s credit cards are not filed under your name. This should also be the case for all financial statements such as income statements, balance sheets and cash flow statements.
Note that it is important to ensure that your business’s finances are separate from your personal finances to avoid your business being viewed simply as a personal hobby by the ATO. Personal hobbies do not enjoy the benefits of business expenses tax deductions; thus, your tax liabilities increase.
This segregation of finances also forces you to better manage your business’s cash flow. You can easily navigate through your business’s finances if it does not coincide with your personal finances. Thus, the blurring of lines can be avoided, and efficient cash flow management can be accomplished.
Take bookkeeping seriously
Top small business experts swear by one critical piece of financial and tax planning advice: Keep everything documented, and keep your documents organised and updated.
Detailed records ensure that you have enough evidence for any claims come tax-paying time. Most small businesses tend to overlook tax deductions when their books are unorganised. You can opt to seek professional advice and assistance—and even get your business to the cloud. Cloud accounting allows you to better manage your books and financial records while collaborating with your accountant and team members in real time.
You can also negotiate with the ATO easily when your books are kept organised and easily accessible when needed.
Seek expert and professional advice and assistance
Hiring a professional can help you manage your business’s financials better. A financial adviser can assist you in developing a specialised financial plan for your business. He or she can also set up a succession plan that enables you to confidently run your business until you can’t (or don’t have to) anymore.
Make sure that the help you acquire for your business provides you with the type of services and solutions that your business needs specifically. Also, make sure that your financial adviser is able to develop strategies and solutions that develop with your business over time.
To learn more about what effective financial planning can do to add value to your business, you can download our eBook, “Keep your business on track with effective accounting strategies.” You may also get in touch with our team of experts at HTA to discuss your business and financial queries and concerns.