I love managing money; playing with numbers puts me in my happy space. But I know it’s not that way for everyone. Managing money can be hard, especially when it’s tied to old money stories and beliefs. I can’t tell you how hard those stories come out to play, even for someone like me, when it comes to business.
It’s not easy to look at numbers when they aren’t matching the amount of work you know you’re putting in. It’s so easy to say, “I’ll review my business books when my business really starts making money.” But let me tell you: the time is now.
The best time to create a financial workflow for your business is when things are slow. If you don’t build a system now then when the money does start to flow in, it will flow out just as fast without a plan and a system. So how does a small business owner build a system for their business finances that doesn’t require hours at YouTube University? I’m sharing some simple steps to help you get–and keep–your business finances in line.
To start, you need a budget.
Just like for your personal life, you need a budget for your business too. I know it feels pointless when your business is new or small because it seems like you don’t have a lot of expenses. I can’t tell you how many times I’ve purchased apps, workshops, books, and supplies because the money was in my account, only to later discover I’d forgotten all about my monthly Canva subscription.
Having a budget in and for your business will keep you focused and keep you from having to constantly infuse your small business with personal funds. Your budget will allow you to make one large capital contribution or owners investment, versus winging it based on whatever you happen to purchase that month.
You can create a budget in a spreadsheet or in a notebook. Simply write out your projected income and subtract from your projected expenses for the month. This will allow you to see when you might have slower months, so you can plan accordingly.
You also need to pick a software–and learn it.
Pick an accounting software–they all do the same thing, and they are all pretty much the same price. There are free accounting software plans, but free still comes at a price. Think about what you need to report and measure and what software feels easy to use. If you need to track inventory or accounts receivable, not all free options have those capabilities, plus if it’s not easy for you to use then no matter how free it is, you won’t use it.
All of the major accounting software companies have extensive YouTube tutorials that are quick and helpful. Whatever software you pick, give yourself 90 days to learn it–there is no plug and play accounting software. It will take time. Be willing to learn and give yourself grace.
If you already have a software that you’ve been paying for but haven’t used because it’s too intimidating, you have three choices: learn how to use it, find another software that is more user-friendly, or hire a bookkeeper. (Just a note here: hiring a bookkeeper doesn’t replace you creating a budget and learning how to manage your books. A bookkeeper keeps your books; they are not a replacement for you doing the work to become engaged with your money.)
I can’t tell you the number of clients I’ve fired because they refused to engage with their money. I had one tell me, “I don’t know what’s in my bank account, that’s what I hired you for.” Needless to say, her business was hemorrhaging cash and even though her profit and loss showed a profit, her balance sheet and statement of cash flows told the full story.
Finally, create your financial workflow.
When will you review your transactions, run reports, pay taxes, etc.? Now that you have your software of choice, you need to have a system of getting things done. No longer will you work on your business finances when you have a moment, or only when you get a sale or run a campaign. This is to be part of your business cadence.
Add it to your calendar and make it official. I work on my business finances along with my personal finances–that way it doesn’t feel like I’m doing extra work. Because I keep things pretty neat and tidy, I’m able to check my business finances in about 30 minutes a week.
My financial workflow cadence includes:
- Checking my transactions, seeing what has cleared and what hasn’t
- Weekly checking of my numbers to ensure I’m in alignment with my income and marketing goals
- Monthly reconciling
- Monthly reporting
- Monthly meetings to go over my reports and see how my numbers align with my marketing goals
- Quarterly and annual budget adjustments
Your financial workflow will vary based on your business needs, but having a workflow will help you stay focused and will help you get back on track when life and business gets full.
Managing your business finances and building a financial workflow doesn’t have to be overwhelming and you don’t need to make it complex. Remember to ask for help and give yourself grace. If you have any questions feel free to comment below!
