Managing your business finances

Now that it’s the new financial year, there is no better time to get your business finances under control. Understanding the current financial position of your business will allow you to plan, expand and grow your business.

Using financial professionals

Looking after your business finances while running your business can be difficult, so you may like to consider using the services of professionals to make sure your business is in the black.

Financial professionals can help you maintain your books, create and stick to a budget, monitor your cash flow and help you make decisions about opportunities like buying new equipment, expanding your business and leasing or buying a commercial space.

Some of the financial professionals you might consider using include:

• Accountant — Accountants can help with a number of business financial needs including preparing financial statements, managing tax and providing financial and business advice.
• Bookkeeper — Bookkeepers can keep track of day-to-day financial transactions, look after your banking, chase overdue payments, pay wages and prepare some financial statements.
• Business Activity Statement (BAS) agent — BAS agents can help you prepare and lodge your BAS to ensure you get it right the first time. They are registered professionals who are specialists in their field. You can find registered BAS agents on the Tax Practitioners Board (TPB) register.

Organising your finances

When organising your business finances, there are some things you’ll need to consider.

A business bank account

If you operate as a sole trader you aren’t legally required to have a separate bank account for your business, you can use your personal account. However, for easy tracking of business income and expenses, you may consider opening a separate account for your business.

Have a look at the Australian Taxation Offices (ATO) Separate business and personal expenses information on how to use a single bank account for both your personal and business finances.

If your business operates as a partnership, company or trust then you must have a separate business bank account for tax purposes.

A bookkeeping system

There are many manual and electronic bookkeeping products available that could suit your business needs. If you have employed a financial professional, have a chat to them about the products that will best integrate with their systems.

Managing your cash flow

Keep track of the money that is coming in and going out of your business. An easy way to do this is to use a cash flow statement. A cash flow statement will allow you to track your income and plan your expenses, so that you can plan ahead and know you will have the money to pay your bills.

It’s also important to send correctly formatted invoices for the goods and services you provide. Make sure to include a clear due date and follow up on payments that fall behind. If your business provides subscriptions or memberships, you may wish to consider setting up an automatic payment system or direct debit to save yourself the hassle of having to chase payments.

Find out more

There are financial templates available to help you get an understanding of the financial position of your business:

• Cash flow statement
• Profit and loss statement
• Balance sheet
• Financial calculators

For further information, go to www.business.gov.au.

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