One way to effortlessly achieve your long-term financial goals as a business owner is to set up a properly automated system for handling all incomings and outgoings. How much of your revenue should go to maintaining cash flow? How much should go to paying yourself? How much should go towards an emergency fund? These are questions that need to be answered every month and not many business owners know how to address them.
Why you should automate your business finances
Automating expenses and savings for your business, simplifies the overall finance management process. This is because human behaviour gets in the way of specific finance related functions that can negatively impact business. Some examples include paying supply bills, paying members of staff on schedule, putting away money in an emergency fund that can be drawn to maintain cashflow during thin liquidity and more. All mentioned examples are important to the business process and can lead to a reduction in productivity and in turn affect the bottom line.
With automation, you can eliminate human error in the handling of your business finances.
How to Do it
Budget
It is important to know how much you need to keep the business process running efficiently. During these calculations, don’t forget to include yourself into the equation as you need to pay yourself from the business. This is to avoid indiscriminate dips into your business finances. When you have a definite budget, you can focus on ensuring that all obligations are met on the right dates using automation. If invoice delays will affect the fulfilment of obligations, you can work in properly facilitated borrowing, such as overdrafts, into the automation process. The budget can equally help you see how much of the profits in each cycle, can be delegated towards the business savings. When you have your budget carefully set up, you can have more money going into savings with unexpected profits or bonuses.
Automatic Payments and Expenses Round Up
Talk to your bank about automatic deductions from the business account to designated points including employee accounts, your personal accounts and the business emergency fund account. This way, the bank handles all the processes automatically during the time scale provided. Don’t forget to automate borrowing if you regularly need external cash to sort the business cash flow pending invoices.
Use Software
If your business can afford it, talk to software experts that can create a fully automated process that can have secure access to your business finances and execute set instructions on a regular basis.
