It is important to organize your business finances whether your business is small or large. If your business is a large one, then you will likely have a full time accountant to look after your finances, so the following tips are generally aimed at small businesses where you will probably be doing it yourself.

Organize Your Paperwork

The most important tip is to get organized, and have a file for everything: invoices in and out, receipts, payments and anything else connected with the business. Try to keep your filing system consistent, so use either punched ring binders, wallet files, box files or folders for everything and don’t mix them up. You can then keep your files neatly stored on a shelf or in a filing cabinet.

You should also keep your bills together, one file for unpaid bills and another for those you have paid. That will make it easier for you to check what has been paid and what has still to be paid, and it’s always a good idea to keep unpaid bills filed in a prominent position and not hidden away in the bottom of a filing cabinet

Take Time Out for Your Business Finances

Set aside time in your diary each week for organizing your business finances. It is easy for small business owners to have bills, invoices, receipts and so on lying on desks and in drawers ‘awaiting filing’ while you are doing something ‘more important.’ Take a couple of hours each week to make sure everything is filed where it should be and bills requiring payment are paid.

Negotiate Discounts for Fast Payment

If your cash flow is healthy you will likely be able to negotiate a discount with your suppliers for immediate payment of their invoices. Many suppliers appreciate quick payment to keep their own cash flow in a healthy situation and will agree to a discount of up to 2% -3% for immediate payment. If they refuse, then wait as long as you can before making payment. Your money is better in your bank than theirs, so if you have 30 days then take 30 days.

Check Your Invoices and Statements

People make mistakes, so check your invoices to make a sure you are being charged the correct amount and that any discounts negotiated have been applied. Also make sure there are no hidden charges you have not agreed. The same applies to bank and credit card statements: make sure they are correct and if you are charged for late payments try to negotiate your way out for them. Many banks will cancel charges if you are only a day or so late – but only if you ask them.

Be Careful With Credit Cards

You are best to pay your bills by check or debit card, but if you use credit cards in your business then check your interest rates and any transaction fees. Compare rates and fees and if you find better elsewhere let your credit card provider know this and ask them to match. If not, then change your card. You could use the ‘interest free’ card offers, but make sure you are never late with payments or you could be hit hard. Only use credit cards when nothing else is suitable. Use separate cards for personal and business use.
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