The Small Business Owner’s Bookkeeping Guide to Skyrocket your Cashflow

As a small business owner, you’ve already got enough to do without having to worry about your books. Don’t you agree?!

And bookkeeping can be one of the biggest challenges small businesses face.

Afterall, it’s the link to meeting your tax and reporting obligations, complying with the ATO, and understanding your finances in a way that leads to strategic business growth and success.

It’s one of the most important functions of a successful business and in this blog you’ll discover why.

Why is bookkeeping important for small business owners?

Whether you do your books yourself or have a bookkeeper, bookkeeping is your business’s financial heart; a vital business task that’s critical to growth and success.

Here are some of the biggest benefits of bookkeeping:

• It organises your financial information into an easy-to-read and understand format

• Helps you track your profit

• Shows where you can cut down on expenses

• Helps organise your cashflow (so you have more money in the bank!)

• Shows the secret path to future success with real-time insights, analytics and trends

• Allows you to make more informed decisions for future growth

• Makes reporting and tax time easy for your accountant so you can comply with the ATO

• Keeps track of all receipts, invoices, expenses and other important information the ATO needs

• Helps you to budget, especially when you have quieter periods such as Christmas

Cashflow tips that lead to more abundance

While bookkeeping may be considered the heart of your business, cashflow is the lifeblood. It keeps the business going. When you have an abundance of cash flowing into your business, you can do more and help more people. This may look like upgrading systems, processes and platforms; hiring team members; increasing your marketing and advertising spend; and saving for those rainy days when cashflow is tight. When you don’t have cash coming in as regularly as you need to run your business it can be stressful and frustrating.

Here are my 5 best cashflow tips:

1. Invoice regularly and in advance

Invoice regularly, and wherever you can, invoice in advance, especially if you or your clients are taking holidays or shutting for a period of time (such as Christmas).

For example, invoice in December for January. This gives you a boost to your cash flow and your clients can continue working on their business if they choose to.

2. Ask for a deposit before work begins

It’s always ideal to get payment upfront, however, if that’s not possible, the next best thing is to get a deposit.

As a small business owner, your customers may have their own cashflow issues so allowing them to pay a deposit means you both win. You get some cash through the door and they get to lock in your valuable service.

3. Provide payment options and plans

Being flexible in the way people pay you can lead to competitive advantage, and increased sales and cashflow.

For example, a monthly payment plan projects cash into the future so you can see exactly what money is coming in and budget accordingly.

4. Follow up, follow up, follow up!

The fortune is in the follow up. Follow up your leads, especially quotes, in a timely manner. You can set reminders in your bookkeeping software, like Xero, to do this automatically.

The same can be said for following up to collect payments from outstanding invoices. Set email reminders for your clients before the due date and then follow up again if the invoice is not paid on time and no arrangement has been made to pay.

If you don’t feel comfortable doing this, ask your bookkeeper to handle it for you.

5. Create a promotion for when times are tough

You can increase sales and cash during your quieter periods with some strategy and planning. Talk to your bookkeeper or check your year-on-year financial records to see where your peaks and troughs are.

When you know where your quieter months are, do a promotion leading up to that time to drive new clients and secure repeat business from past and current clients.

Bookkeeping for business coaches

As you’ve discovered, all small business owners, also including solopreneurs, contractors and business coaches, need healthy bookkeeping practices to create a financially healthy and profitable business.

However, as a business coach, it’s important that your clients have their books and numbers up to date so you can help them make informed decisions about areas of their business, for example marketing, advertising and strategic growth.

Having accurate information about your clients business as a coach will help you help them grow.

Bookkeeping growth hacks for small business owners

Up to date bookkeeping leads to business growth that can skyrocket your success because it shows you the necessary information you need to make the best decisions for your business.

Here are my final gold nuggets to help grow your business:

• Understand where you’re spending money so you can reduce your outgoings. When was the last time you looked at insurances and subscriptions? Get rid of what you don’t need and make this a regular task.

• Use that saved cash to invest in your business growth, for example, by hiring a strategist, implementing systems and processes, or increasing your ad spend to be seen by more potential clients.

• Hire a great bookkeeper. They will be worth their weight in gold when you start seeing your business flourish.

About Accounts All Sorted

At Accounts All Sorted, Keryn and her team have more than 20 years of knowledge, experience and wisdom, and can not only help improve your small business with their bookkeeping skills and strategies, but also assist with business growth solutions tailored specifically for small to medium businesses. To have a conversation about your business’s bookkeeping needs, visit www.accountsallsorted.com.au