Posted on 22 November, 2017 | 2 min
Money. It’s tricky for a new business. On one hand, you need money to get your business going and growing. On the other hand, it can cripple your progress if you have to prioritise bills over customers.
John Rampon (founder of Due.com) shares some advice for startups, his tips for managing money include; recognising that much needed money is coming in to your business takes time, keeping an eye on where your money is coming from is paramount, and raising money on a validated product will make a difference to startup success. With this in mind, we can see how important money is to a startup.
Understanding your money is key to keeping your business healthy. As a new startup, being thrifty with your money and working smarter with what you have while you build your base is the goal. After all, less money is less risk - at least, less financial risk.
You’ll have the opportunity to lessen confusion about money and create business success, by taking advantage of the tools available to help you manage your money and perform better financial forecasting.
Easy-to-use cloud-based apps cut through the time, headache and human error of dealing with your money manually.
Setting-up a startup business is a dream for many, but there are some emotional challenges you’ll face as a business owner like:
- Staying on top of basic tasks and making personal time for yourself while working long hours. This is especially true if you work from home.
- Feeling comfortable and being ‘on top of things’ with the money side of your startup business can help reduce the burden on your shoulders
…and most importantly believing in yourself, no one else is going to do it for you. You are your strongest advocate.
Learn more about how apps can power your money.
How business apps can help?
Time is the most valuable commodity for a startup, and using the best apps for your business is one of the easiest ways to buy yourself more precious hours
Bring financial clarity to your startup by choosing an accounting app that’s right for your business; some of our recommended apps include Quickbooks Online, Sage One and Free Agent. These money management tools can help you automate your financial administration, streamline invoicing, and make things easier, come tax time. Combine Expensify to help keep an eye on your expenses that needs approval, so you can get a view of where your money goes.
Use business data to help you better understand your money
It’s not just a matter of having the right tools, it’s about using them well. Apps can help you stay in control by making your money management more efficient. As you take charge of your money, you’ll have a better understanding of the big picture of your business.
To stay on top, we recommend that you keep an eye on these three financial health indicators:
1. Business Growth
Compare revenue and expenses over selected periods to monitor growth trends.Assess how you’re doing each month compared to your business plan, and from the month (and year) before as you grow.
2. Cash & Commitments
You need to keep an eagle eye on what clients owe you, and which ones take the longest to pay. The longer an invoice is outstanding, the less likely you’ll be paid – so be prepared to nip overdue accounts in the bud. Keep an eye on your cash, money owed to you and your unpaid commitments. This way, you can keep yourself in the clear.
3. Money Owing
You need to keep an eagle eye on how much clients owe you, and which ones owe the most. The longer an invoice is outstanding, the less likely you’ll be paid – so be prepared to nip overdue accounts in the bud. Get a clear understanding of who your debtors are an how much they owe you so you can take action to chase down debt.
It’s time to dig deep into your financial performance metrics! When you use the best tools for your startup, you can forecast more accurately, avoid cash gaps, and take advantage of opportunities on the horizon.