Manage Your Start-up’s Finances in 5 Easy Steps - Business Insight - Canon Singapore

    Manage Your Start-up’s Finances in 5 Easy Steps

    Manage Your Start-up’s Finances in 5 Easy Steps

    For any business to succeed, its finances has to be in good health. After all, poor financial management is one of the leading reasons why start-ups fail.

    The good thing is that you don’t need to be an expert to keep your finances in shape. Just knowing the basics alone can help you make better business decisions that will have a positive impact on your finances. We show you how.

    1. Have a proper bookkeeping system.

    Good financial management begins with good bookkeeping. Whether done manually (using accounting books), electronically (with spreadsheets) or with the use of accounting software, bookkeeping keeps track of money going in and out of your business.

    The key to choosing the right bookkeeping system depends on factors such as the frequency you would like to receive financial statements, and if you require one advanced enough to link up with a Point-Of-Sale system and handle other matters such as payroll, automatic invoicing or stock management.

    A sound bookkeeping system not only does makes tax filing a lot simpler, it also provides a good assessment of your company’s financial health.​​​​​​

    analyse your financial statements

    2. Analyse your financial statements.

    A bookkeeping system yields financial statements such as the income statement (also known as an earnings report), a balance sheet (displaying the assets, liabilities and amount of capital invested into the business) and cash flow statement (showing the amount of money made and spent over a period of time).

    Analysing the data obtained from these reports gives you an accurate picture of your business financial health. They can then be used to identify trends, make forecasts and make changes to your business plans in a timely manner.

    3. Learn to manage your cash flow.

    If a business were a human being then cash flow would be like oxygen flowing in and out of a person. Inflows represent money flowing into a business (made up mostly from the sale of goods or services) while outflows dictate money leaving a business (generally in the form of expenses).

    To properly manage your company’s cash flow, you need to first analyse its components such as accounts receivable (sales that have not been collected in cash yet), accounts payable (money you owe your suppliers) and inventory (supplies kept on hand). The goal, of course, is to have cash inflows surpass outflows.

    Minimising expenses such as operational costs is one of many ways to effectively improve your business’s cash flow.

    equipment for the long run

    4. Purchase equipment for the long run.

    Rising operation costs such as servicing of office equipment can eat into your bottom line. That is why you should always insist on brands with a history of reliability when purchasing equipment – brands like Canon and its range of business solutions.

    Offering high quality products that are easy to use and low in maintenance to suit any business need, Canon products help keep overheads down while increasing productivity and efficiency. Furthermore, they come backed with strong after-sales support to ensure your business runs smoothly and giving you a piece of mind.

    5. Prepare a budget. And stick to it.

    Despite the small size of most start-ups, having a clearly defined budget is of utmost importance. Not only does it give you a clear idea of the resources you can work with (which is useful when planning your company’s growth), it also helps to keep your spending in check.

    When developing a budget, be sure to prepare for a best-case and a worse-case scenario. This will allow your business to adapt quickly should the need arise. Also, come up a 5-year business plan to give yourself long-term goals to work towards.

    Remember, just like your personal finances, your company’s finances are in your control. With money being the lifeline of any business, manage your finances well and you’ll see your company grow from strength to strength.