How to Stay on Top of Small Business Finances

Posted on 9/21/2025, 11:26:32 AM

When you run a small business, one of the most important factors is ensuring that you keep on top of the financial situation. After all, you could have the best business idea in the world, but it will all come to nothing if you don’t keep the cash flowing in on a regular basis. So, let’s look at three of the main financial areas of running a small business and the ways in which you can get them operating more efficiently.

Day-to-Day Money Management

When it comes to daily money management, many small business owners find it useful to hire a good bookkeeper or use accounting software to keep better track of income versus costs. This way, you can look at ways that you can reduce your outgoings. You should have a clear business plan in which you make financial projections that are regularly updated. And you need to ensure that your invoicing is always done efficiently. Send them out promptly with a clear deadline for payment and make sure you chase up clients who are not paying you on time.

Separate Your Accounts

Keeping your business and private accounts separate is one of the best ways that you are going to be able to keep track of your expenses. This way, you won’t get mixed up between your own finances and any business loans that you have taken out. Don’t forget to pay yourself as well, so you can properly test the profitability of your business. Start off small and only start to increase your earnings when you are sure that your company can afford it. Frugality is one of the most important virtues of the small business owner.

Bigger Business Issues

When you are first starting out, a good rule of thumb to follow is to have three months of living expenses saved, plus whatever you need for your general business expenses. Be careful with anything that you are outsourcing, ensuring that you are getting the highest level of service for the money you are investing. Legal fees, in particular, can be very costly. Start off by taking control of your own marketing and public relations spend - this can always be expanded over time. Renting rather than buying is the more prudent approach to begin with, and you will usually be better off running your business from home for as long as you possibly can. Before you plan any kind of expansion, make sure you are in a comfortable financial position. Many business owners get tripped up by trying too much, too soon.

Stay Organised

When you run a business, it is very easy to get sucked into the bigger picture projects so much that you fail to properly manage the financial aspect of your company. Many companies look to hire a professional accountancy firm to take care of this for them. Ultimately, running a successful enterprise is all about organisation and staying on top of the finances, and taking steps to adjust and develop your plan whenever you need to.