Are your running your own small business? In Australian, there are millions of owners running some kind of trade or startup venture. However, the exit rate in the country is also high, meaning many businesses are also failing.
What could be the problem? Most, will tell you it has something to do or related to financials. In the next sections, we will walk you through some financial management basics for small businesses to help avoid disaster.
Organise Your Books
The Australian Taxation Office requires businesses fix their business records. Your books should be legible and accessible at least in the past five years. However, what exact paperwork do you need to be with you?
- Credit card and business account statements
- Balance sheets, profit and loss statements
- Payments to employees and any PAYG tax
- Receipts and invoices for goods and services both provided and acquired
- Stocktate details and register of assets
It is best to have a solid record of your business cash flow so you know where your money is going and coming from. This may mean tons of paperwork but having a consolidated view of your financials will take you a long way.
Be Aware of Your Limits
Just like when you’re investing on anything, you must know your financing limits. The same goes for managing your small business finances. Know your limits so you know up to what extent you can operate and push for your goals. This also tells you whether you can borrow money and afford repaying it in the long term. The goal is to stay afloat despite your limitations.
For small business financing concerns, talk to our Gapcap team. We have easy loan application and repayment terms that can help businesses keep operating or get off the ground. Check out our website for more details.