I talk to a lot of local business people through my work for Greater Building Society and Business Charlestown and our involvement with The Greater’s support of the Lake Macquarie Business Growth Centre. In business you have to make every hard earned dollar count. I find that people are often too busy working in the business to focus on finance. In the process they can be wasting the money they are working so hard to bring in or placing their business at risk.
Sound familiar? Stopping to focus on finance isn’t as hard as people think and there’s plenty of help about. Here are my five simple steps to help you do a business finance health check.
- Have the right finance and accounts
You may have had the right accounts and finance when you started your business years ago but do they meet your current business needs? In other posts some of my colleagues have outlined the range of ways to finance your business. I recently helped a new customer who had a significant amount of cash in an account earning very little interest. He was foregoing thousands of dollars in revenue and could have been putting that money to better use in the business.
- Cut the fees
The amount of bank fees paid by businesses continues to grow. The latest annual reserve bank report into bank fees showed business paid a staggering $7.49 billion in fees in 2013, up 2.8 per cent. Our business banking team did a review and found they could save 90 per cent of people coming to The Greater for a comparison deal some money on fees. You should know what fees you are being charged and why. Ask your financial institution or business banker to tell you. You shouldn’t be paying account keeping fees on everyday transaction accounts. Using your financial institutions own ATMs as well as internet and mobile banking can also save you money.
- Automate or delegate to save time and money
Switching to making business payments and receiving payments via internet banking is one way you can save time and money if your financial institution doesn’t charge fees for that service. Your financial institution can also save you time by offering payroll services. Setting up bank feed to Xero or MYOB Banklink can make your accounting simpler too.
- Be on top of the budget/business plan
This is where your accountant, local business advisor or chamber of commerce can help too. You need to be on top of your budget and business plan to run a successful business. If you want finance, a lender will also expect you to be on top of these matters too.
- Ensure you are insured
Checking your insurance can help in two ways. You may be able to get a better premium and save yourself some dough. Having the right level of cover also means you are not wasting money (if you are overinsured) or risking money (if you are underinsured). As well as insuring assets such as buildings and equipment it is also important to consider public liability, professional indemnity and particularly for small businesses, income protection.
Following these five steps will give you is a business finance health check in no time. Working on your business rather than always working in it is essential for business success.
Josh Swetnam is the Greater Building Society's Charlestown Branch Manager and the newly appointed Deputy President of Business Charlestown. Josh has more than 15 years experience in financial services and works closely with business customers and The Greater's business banking specialists.