Make Your Money Management Easier With These Ideas

Managing your business’s money can sometimes feel overwhelming and time-consuming. However, with the right approach, your process can be easier and more effective. Here are some ideas.

• Create a cash forecast. Create a weekly or bi-weekly forecast that lists your expected income and expenses. Use this plan for upcoming obligations, such as payroll or loan payments, and to determine when you have enough extra money to make a capital improvement or hire a new employee.
• Tie your bank statement to your accounting software. If you aren’t doing it already, consider linking your bank accounts to your accounting software. Instead of waiting for monthly statements, real-time bank feeds allow your accounting system to receive transaction data as it happens. This means you can reconcile more frequently—weekly or even daily.
• Investigate discrepancies immediately. An advantage of reconciling your accounts weekly or daily is that you can look into discrepancies quickly after they’re discovered. Common causes of a transaction mismatch are bank processing delays, duplicate transactions, missing receipts, and unrecorded bank fees. Reviewing discrepancies as they arise can help resolve issues before they affect your financial reports.
• Create controls for ACH transactions. Multiple issues could crop up if you routinely pay some of your bills using ACH. If you find a duplicate invoice from a vendor, how do you know it was paid? How do you document payment approvals? Do you have controls for recurring transactions? Creating ACH payment controls can give you peace of mind that money is being spent appropriately.
• Keep a detailed audit trail. A well-documented audit trail can make your life easier should an issue arise, such as a discrepancy. Be sure to keep records of your cash deposits and withdrawals, bank statements, receipts and invoices, and any notes on discrepancies. Storing these records digitally ensures easy access and reduces the risk of losing important financial information in the event of a disaster.
• Frequently review financial reports. Make it a habit to review your balance sheet, income statement, and cash flow statement every month. This helps you identify trends, spot issues early enough, and make informed strategic decisions.

By creating controls, forecasting your cash flow, and automating recurring tasks, you can turn your business’s money management into a well-oiled machine.