There’s a very specific kind of dread that comes with opening your accounting software and realising you have no idea what you’re looking at. Or worse – you haven’t opened it in weeks… or months… or since your accountant ghosted you in 2022.

As an bookkeeper, I see you. And I promise: you’re not the only one.

Over the past 25 years, I’ve worked in and around small businesses, and now I spend my days helping women manage their business finances without fear or embarrassment. I can confidently tell you: your Xero file is not the worst I’ve seen. And no, I’m not judging.

But there are a few things I do wish more small-business owners knew – especially if they’ve ever felt behind, overwhelmed, or like they somehow missed the class where everyone else learned how to do this.

Avoidance isn’t laziness, it’s a nervous system response.

If your stomach flips or your brain fogs at the thought of logging into Xero, you’re not flaky or irresponsible. You’re probably overwhelmed or under-supported – but more than that, I’d bet you simply don’t have the capacity to take in new information in those moments.

When we feel unsure or threatened, our brains and bodies can shut down. It’s that “lights are on but nobody’s home” feeling. That’s biology, not failure.

Understanding your numbers shouldn’t activate your stress response. If it does, you need support that feels safer and slower – and you absolutely shouldn’t feel pressured to just “push through”. That’s when the overwhelm ramps up, everything feels harder, and suddenly you’re ready to burn it all to the ground.

We don’t need more information, we need transformation.

Yes, there are webinars, tutorials, e-books, and forums galore. But if you’ve ever sat through a 90-minute training and walked away more confused than when you started – join the club. Learning which buttons to press in your software means absolutely nothing if you don’t genuinely understand why you’re pressing them or what’s happening in the background.

What you really need is someone who can help you apply what matters to your business. Someone who can explain what’s important to you – and what’s completely irrelevant. Someone who can walk you through setting things up in a way that supports your brain and your bandwidth.

While AI tools can help, if the real issue is that you just can’t connect the dots between what’s on the screen and what’s happening in your business, they don’t always cut it. Even in an AI-powered world, there’s still so much to be said for personalised, human context – especially for neurodivergent business owners juggling a lot.

Shame around money often starts early but it doesn’t have to stay.

So many of us carry stories about “not being good with numbers,” usually dating back to how we felt in maths class. Add a couple of confusing chats with accountants, and it’s no wonder people freeze when it’s time to talk finances.

But here’s the kicker: you were never taught this properly. Nobody talks about how a handful of bad experiences with numbers can stop you from asking questions when you become a business owner (because spoiler: you don’t magically get gifted this knowledge when you get your ABN!).

This is not a reflection of your intelligence – it’s simply a gap, and gaps can be filled with the right guidance. 

This is where your bookkeeper comes in: You’re allowed to ask questions and you’re allowed to start again. You just need to find the person you feel safe asking that first question. After that, the rest tend to flood out.

Clarity in your numbers = confidence in your business.

When you know what’s coming in, what’s going out – and why  – you can make better decisions. Full stop. 

Understanding your numbers helps you price better, spot patterns, pay yourself consistently, and plan ahead without guessing. No more 3am panic about tax bills. No more winging it. While it might feel like it sometimes, bookkeeping isn’t just another chore on your to-do list – it’s the foundation for sustainable growth and peace of mind.

You don’t need to be a “numbers person”, but you do need to understand the basics.

You can absolutely outsource your bookkeeping if that works for you – but handing it off without understanding what’s being done leaves you vulnerable. At the end of the day, bookkeepers and accountants act on your behalf – and they can only work with the information you provide. If there’s a mistake, the ATO comes to you.

And if you choose to DIY? You don’t need to become an expert – but you do deserve support from someone who speaks your language. That means no jargon and no judgment. Just someone who can help you set things up in a way that makes sense to you.

If your bookkeeping feels heavy, scary, or soul-sucking, know this: it’s not because you’re bad at business. It’s because no one ever taught you how to do it in a way that actually works for you. And that’s something you can absolutely change.

The post Five things I wish all small-business owners knew as a bookkeeper appeared first on Inside Small Business.

The Australian Securities and Investments Commission (Asic) has warned small-business directors that the misuse of company money and assets for personal gain can lead to companies being unable to pay their debts, harming other small businesses who are creditors.

The reminder follows recent action that has been taken against company directors following Asic investigations. One case involved a director of two construction-related companies who was alleged to have dishonestly used her position as a director to gain an advantage for herself by transferring company funds to a credit card and other accounts and using the funds for her personal use. The two companies subsequently went into liquidation, with one of these owing money to small businesses that has yet to be repaid.

Another case involved a director of a beverage distribution company who was found guilty by a court for dishonestly using his position to gain an advantage by using company funds to pay legal fees and other costs to annul his personal bankruptcy

These cases relate to reports lodged by registered liquidators from 2023-24, which found that poor financial control, including misuse of company assets for personal purposes, was a cause of 36 per cent of company failures. In addition, from January to March this year, Asic has prosecuted 34 individuals for 67 offences in failing to assist registered liquidators, resulting in $244,500 in fines and $4360 in costs.

Asic has pointed out that company directors have legal obligations to ensure they act in good faith in the company’s best interests ( which may involve considering the interests of shareholders, customers, suppliers, employees and other stakeholders) and not improperly use their position to gain an advantage.

In particular, Asic highlighted:

• Directors are managing company money, not their personal money, and they cannot treat company property, assets or funds as if they are their own to pay personal expenses.
• Directors must consider the interests of their company as a whole when making decisions about company assets and money.
• Directors have a legal obligation to act in the best interests of their company, which includes paying small business creditors, employees and tax debts when due.

The regulator warned that misuse of a company’s money and assets can lead to a company not being able to pay its debts, which can cause significant harm to the community (through unpaid tax debts), employees, customers, suppliers, and even creditors as the disruption to cashflow can impact their own ability to cover expenses and pay suppliers.

Company directors who are found to be misusing the funds and assets of their companies will not only be subject to legal action by Asic, which may include civil and criminal penalties that may result to their disqualification from acting as a director of a company..

Erring directors may also be subject to actions by the Australian Taxation Office for unpaid company tax debts. And if a company goes into liquidation as a result of such misuse, the liquidator tasked to investigate the reasons for the collapse of a company may sue the director seeking compensation and will be duly supported by Asic.

Asic has advised company directors to seek professional advice if they are uncertain about their legal obligations or have concerns about the company’s finances. It is important to seek this advice early to avoid trouble. In addition, Asic’s website has a small business section, which contains information to assist small business company directors in understanding their obligations as company directors.

The post Small-business directors reminded of their legal responsibilities with company money and assets appeared first on Inside Small Business.

Not sure where to start? We’ve brought on four superstar accounting professionals to help us put together a comprehensive EOFY to-do list. That means actions you can take now to set yourself up for success next financial year.

Save yourself the stress and anxiety, get your ducks in a row now, and come into July 1 feeling fresh, organised, and prepared.

1. Find an accountant you love

If you don’t have a tax professional that you trust with your life (or your business), now is the time to find one.

• Understand what you need your accountant to be able to do. For instance, if you need someone to help you with tax-related tasks, make sure you seek out a registered tax or BAS agent. If you’d like someone to help you out with accounting software, make sure you seek out someone who is across technology. Always use the Tax Practitioners Board Register to find a registered tax agent.
• Book check-ins with your accountant throughout the year, not just when BAS is due or at tax time.

“These check-ins aren’t just about ticking compliance boxes – they’re about strategy, clarity, and making sure your business is actually working for you.”

Catarina Santini, business advisor, accountant, and tax agent

2. Educate yourself

Whether you’re a brand-new entrepreneur or a seasoned business owner, you should be across your own finances.

• Browse the ATO’s Tax Time toolkit for small business, which they describe as a “one-stop shop” for tax-related help.
• If you’re after more structured learning, check out the ATO’s “essentials to strengthen your small business” platform; this offers short courses on topics like record keeping, cash flow and deductions.
• Each quarter, the ATO changes shares its small-business focus areas to help small-businesses and their tax professionals understand how they can get and stay on top of their tax, super and registry obligations. You can check this on the ATO’s website: “Small business focus areas”.
• Look up whether any legislative changes are coming up that might affect you. If you have employees, for instance, check for any upcoming changes to awards on the Fair Work Ombudsman’s “Major award changes” page, for instance.

3. Review your needs and obligations

Maybe your turnover has increased, you’ve employed new staff, or the nature of your business has changed? There are many cases in which your business’s needs and obligations might have changed. Review how things have changed for you in the past financial year and what that might mean.

• Review insurances: Do you need extra cover due to changes in business activities or income? Or are there insurances you no longer need?
• Review payroll tax obligations in your state, if you have employees.
• Check if you need to register for GST for the first time, or if you will need to soon.

4. Get organised

If you’re not keeping track of sales, money might be going down the drain. Keeping receipts is essential; if you’re ever audited by the ATO, bank statements won’t cut it.

• Use the ATO’s record-keeping evaluation tool to help you evaluate your current system, if you’re unsure about it.
• Consider using the ATO app if you’re a sole trader.
• Assess whether you (really) have a system that allows you to log invoices, receipts and expenses both regularly and accurately. If not, it’s probably time to get your accounting software in order (see below).

5. Set up new software

If you need new software, make sure you leave plenty of time to get it working (and integrated into your processes) before the new financial year starts, to set you up for success.

• Assess your existing accounting software – is it working for you? Can you create efficiencies? If you want to change software or start using it for the first time, leave plenty of time to research and implement. 
• Book a training session with your accountant (well in advance of June 30) to help you set up new software, if you feel you need to do so.

6. Create some quick cashflow wins

• Review pricing – compare your rates with industry standards and factor in rising costs.
• Set up an automated transfer to send some money to a dedicated tax/GST savings account.
• Use the ATO’s Cash Flow Coaching Kit, which has tips to help you meet tax and super obligations without them getting caught up with your business cashflow.
• If you’re struggling to get paid on time, consider automating invoices and setting up direct debits from clients.
• Check your bank accounts for long-forgotten free trials etc – services you don’t use or seldom use. There are software services that can help you do this, for a small fee.

7. Calendarise your year

Make it easier for yourself to keep up with key dates by putting them in your calendar now.

• Ask your accountant for key tax dates – or find them on the ATO website – and put them into your calendar.
• Mark down upcoming legislative changes that are relevant to you. The ATO also has on its website a page dedicated to tracking upcoming legislation and a small-business newsroom. You may also want to ask your accountant about this if you’re unsure what will affect you.
• Map out income and expenses ahead of time, as best you can.

8. Identify (and prepare for) deductions

Make sure you’re not missing out on any deductions. Your accountant should be able to help you work out what you can deduct.

• Identify potential tax deductions: home office expenses, vehicle costs, professional development, underused assets and excess stock, bad debts, and so on.
• Identify pre-paid business expenses – like insurance premiums or telco services – and ask your accountant whether you can get an immediate tax deduction on them.
• Ensure that all June-quarter superannuation contributions are paid by June 30, to accelerate the tax deduction.
• Consider voluntary super contributions before year-end to maximise tax benefits and boost retirement savings.
• If your business is looking to pay bonuses, put in place a properly executed bonus plan by  June 30 to claim the deduction this year. 
• Consider how your trading stock is valued. Trading stock can be valued using different methods for taxation purposes – at cost, market value or replacement value. Changing the valuation method at year-end for tax purposes can either bring forward or defer an amount of taxable income so it pays to look closely at the method adopted.

“Provided they are used for business purposes, for instance in work recreation areas or office receptions, it is even possible to claim items like TV’s, gym equipment, works of art and computer gaming terminals. If you’re claiming more left-field deductions like these, make sure you keep proper records.”

Mark Chapman, Director of Tax Communications, H&R Block

Thanks to the following tax and accounting experts who contributed to this checklist.

The post The comprehensive EOFY checklist for small-business owners appeared first on Inside Small Business.

In the free online sessions, business owners can learn about various aspects of small-business operations, including:

• Starting a small business
• Record keeping
• Claiming small business tax deductions
• Cash flow for small business success
• Goods and services tax (GST)
• Hiring and paying workers.

The masterclasses are targeted by state and territory and each run for an hour. There will be several live sessions for each region across the coming months; business owners can register via the business.gov.au website.

The ATO also provides 30 short free courses, which are already available on its website.

The post EOFY 2025: Free upcoming ATO masterclasses for small-business owners appeared first on Inside Small Business.

The research revealed that 32 per cent of Australian small-business owners admit to being emotionally attached to their bookkeeper/accountant, with 45 per cent even confiding in them for advice beyond financial matters. 

Furthermore, 31 per cent have also admitted to sharing their biggest secrets with them, from secret shopping habits (35 per cent) to family secrets (nine per cent). As far as communication is concerned, 28 per cent of small-business owners admit to texting their bookkeeper/accountant at least once per day.

On the other hand, a staggering 46 per cent of Australian small-business owners admit that they spend less than three hours per week together with their partners (not including sleeping time).

According to the research, this unique relationship is founded on trust and loyalty, with 40 per cent trusting their bookkeeper/accountant more than friends or family with matters related to their business, and 46 per cent going to their bookkeeper/accountant for advice that goes beyond finances or accounting.

So, what are the benefits? The research revealed that accountants/bookkeepers can wear many hats. Majority (53 per cent) have said their accountant/bookkeeper makes them feel less anxious, especially with regard to their finances, and gives them comfort knowing everything is under control. 44 per cent have said that their bookkeeper/accountant has provided them confidence.

Furthermore, 29 per cent have shared that their bookkeeper/accountant has saved them between $5,001 – $10,000 per year and 15 per cent shared that their bookkeeper/accountant improves their relationship with their partner/love life by reducing financial stress.

The post Accountant or therapist? Small-business owners rely on their bookkeepers for emotional support appeared first on Inside Small Business.

This was revealed in the latest Airwallex Spend Management Report by Australian-founded finance platform Airwallex, which surveyed 500 senior finance leaders, including chief financial officers, of Australian headquartered companies, to identify the most pressing challenges and issues they are facing in spend management. 

The survey noted that overall, 88 per cent of respondents are facing challenges managing their global spend and expenses. Furthermore, 74 per cent admitted that their company’s current systems are inefficient and unreliable, which is seen to not only have contributed to their business’ stunted growth but also strained their relationships with suppliers and employees.

Drilling down on the matter of finance management challenges, 63 per cent acknowledged that they are still managing expenses manually, often relying on ‘archaic’ applications like spreadsheets. Overall, 60 per cent have either different tools or different processes for managing spend outside of their home market, which is seen as an indication of a lack of a unified approach to finance and spend across borders. However, 44 per cent shared that they are not satisfied with their current spend management solution while 51 per cent don’t believe their current systems provide adequate visibility into cashflow across regions.

Shannon Scott, SVP, Global Head of Product at Airwallex said that legacy systems and an increasingly global workforce are making it more difficult for finance leaders to manage spend and expenses. 

“Adopting more sophisticated financial solutions can be a game-changer for Australian businesses as they look to accelerate their growth beyond orders. A spend management platform that can handle cross-border transactions, multi-currency management and integrated vendor spend and employee expense processes can save businesses time, money and effort and be the lever that boosts growth and efficiency,” Scott said. 

The post Slow, outdated finance management tools stalling business growth appeared first on Inside Small Business.

1. Not looking at the numbers regularly

One of the most critical mistakes small-business owners make is not reviewing their financial numbers regularly. It’s essential to keep a close eye on your financial statements, including the profit-and-loss statement, balance sheet and cashflow statement. Many business owners say, “I’m not good with numbers,” and put their heads in the sand, which is ultimately the biggest financial mistake of all.

Why this matters

Regularly reviewing your financial statements helps you understand your business’ financial health, identify trends, and make informed decisions. It allows you to spot issues early, such as declining profits or increasing expenses, and take corrective action before they become big problems.

How to avoid it

● Schedule regular reviews, making it a monthly routine to review your numbers and understand what they mean for your business.

● Invest in reliable accounting software that can generate detailed reports and provide insights into your financial performance.

● Educate yourself about the basic financial principles and how to interpret your financial statements – this will empower you to make better business decisions.

2. Looking only at their bank account as a means to understand their cash flow

Many small-business owners make the financial mistake of relying solely on their bank account balance to gauge their cash flow. This doesn’t provide a complete picture of your financial situation. It gives you just one angle and can get you in hot water quickly, especially if you don’t have a separate account for tax provisions.

Why this matters

Your bank balance doesn’t account for outstanding invoices, upcoming expenses or other liabilities. Relying on it can give you a false sense of security and lead to cashflow problems.

How to avoid it

● Regularly review your cashflow statement to get a comprehensive view of your cash inflows and outflows. This will help you understand your liquidity and manage your finances better.

● Create cashflow forecasts to predict future cash needs and identify potential shortfalls so you can plan ahead and avoid cash crunches.

● Keep a close eye on your accounts receivable and payable to ensure timely collections and payments. This will help you maintain healthy cash flow.

3. Not seeking advice from an accountant when needed

Small-business owners often try to manage their finances independently, avoiding professional help until it’s too late. While managing your finances in-house can save money, it can also lead to costly mistakes. Don’t be scared to pick up the phone for fear of getting a big bill. Finding yourself an accountant you have rapport with can save you thousands in poor decisions.

Why this matters

Accountants have the expertise to provide valuable insights and advice on complex financial matters. They can help you with tax planning, financial analysis and strategic planning, ensuring your business stays on the right track.

How to avoid it

● Don’t wait until you’re facing financial difficulties to seek professional help. Engaging an accountant early can help you avoid problems and make better financial decisions.

● Establish a relationship with an accountant and schedule regular consultations to review your financial situation.

● Take advantage of your accountant’s expertise to optimise your financial processes, plan for taxes and develop strategies for growth.

4. Failing to separate personal and business finances

Mixing personal and business finances is a common financial mistake that makes it difficult to track business expenses, manage cash flow and prepare accurate financial statements. It might seem like extra work upfront, but it will save you time, money and stress down the line.

Why this matters

Keeping your personal and business finances separate is crucial for maintaining clear financial records and ensuring your business’ financial health.

How to avoid it

● Set up separate, dedicated bank accounts and credit cards for your business to keep personal and business transactions separate.

● Ensure all business transactions are recorded accurately and consistently, using accounting software to streamline this process.

● Instead of withdrawing money from your business account as needed, pay yourself a regular salary to maintain separation between personal and business finances.

5. Neglecting tax planning and compliance

Many small-business owners underestimate the importance of tax planning and compliance, leading to unexpected liabilities, penalties and cashflow problems. Ensure you put money aside for tax regularly so you’re clear about what’s yours to keep and what belongs to the ATO.

Why this matters

Proper tax planning helps you minimise your tax liability and avoid surprises, and complying with tax regulations is essential to avoid penalties and legal issues.

How to avoid it

● Work with an accountant to develop a tax plan that aligns with your business goals. Estimate your tax liabilities and set aside funds to cover them.

● Keep up-to-date with tax laws and regulations, ensuring you comply with all filing requirements and deadlines.

● Take advantage of all available deductions and credits to reduce your tax liability – your accountant can help you identify and claim these benefits.

6. Overlooking the importance of financial forecasting

Many small-business owners fail to create and update financial forecasts regularly, but “if you don’t plan, you plan to fail”. Every bulletproof business has a strategy, and this includes a financial strategy, too.

Why this matters

Financial forecasts provide insights into future revenue, expenses and cash flow, helping you plan for growth, manage risks, and make informed decisions.

How to avoid it

● Develop detailed financial forecasts that cover different scenarios, including projections for revenue, expenses and cash flow.

● Update your forecasts regularly to reflect changes in your business environment and performance.

● Use your financial forecasts to guide your business planning and decision-making, adjusting your strategies based on forecasted outcomes.

7. Ignoring the importance of financial metrics

Financial metrics provide valuable insights into your business’ performance and health – a fact many small-business owners overlook. Having four-to-six key metrics that you understand and can guide your decision-making can be a total gamechanger. You don’t need to be a financial pro, but you do need to understand what good and bad looks like in order to make the best decisions for your business.

Why This Matters

Tracking key financial metrics helps you understand your business’ strengths and weaknesses, identify trends, and make data-driven decisions.

How to Avoid It

● Determine the financial metrics that are most relevant to your business, such as gross margin, net profit margin, return on investment, and liquidity ratios.

● Regularly monitor and analyse these metrics to stay informed about your business’ performance.

● Use the insights gained from financial metrics to guide your strategic planning and operational decisions.

In conclusion

Avoiding these common financial mistakes can be the difference between thriving and becoming another small-business failure. Regularly reviewing your numbers, maintaining accurate records, seeking professional advice, and planning for the future are not just important – they’re essential practices for any business owner determined to build a bulletproof business. Don’t leave your success to chance. By being proactive and informed, you can build a strong financial foundation and ensure your business not only survives but thrives for years to come.

This article first appeared in issue 45 of the Inside Small Business quarterly magazine

The post Seven common financial mistakes to avoid appeared first on Inside Small Business.

Here’s how you can maximise these deductions and boost your bottom line as a small-business owner.

Streamlining your home office expenses

For small business owners, home office expenses typically fall into three main categories:

• Essential furniture and equipment: Items like computers, desks, chairs, and phones that are critical for your operations.
• Office supplies: Necessary items such as paper, pens, printer ink, and other consumables.
• Utilities and services: The necessities that keep your office running, like electricity, internet, and heating/cooling.

First, categorise these expenses into two groups: those used exclusively for business and those shared with personal use. When you run your business from home, there are bound to be crossovers between personal and business expenses, as well as purchases that you only use for business reasons. Splitting them into two categories will make it simpler and easier to understand what and how much you can claim.

For the items in your ‘shared’ column, you will need to determine what portion of its use is for business and personal reasons. For example, if you use your laptop for 70 per cent work-related reasons and 30 per cent personal reasons, you can only claim 70 per cent of its value or depreciative value as a deductible. If you’re unsure how to determine the appropriate amount, make sure you consult a tax professional for help.

Expenses that are under $300 and used exclusively for running your home business can be fully claimed. Higher-cost items, however, are treated as depreciating assets, meaning you can only claim a portion of its depreciated value each year.

Choosing the right calculation method

Selecting the best method to calculate your home office deductions is crucial to ensuring you get the best outcome on your tax return. There are two options to choose from, and each one offers pros and cons depending on your circumstances:

• Fixed-rate method: This method allows you to claim 67 cents for every hour you worked from home throughout the financial year, covering everything from utilities to equipment. The benefit of this method is that it doesn’t require strict record-keeping and calculations like the second option, as most of your deductibles are accounted for in the fixed-rate calculation. This method may be ideal for those who don’t have many large deductibles and prefer a straightforward calculation without the hassle of itemising every expense.
• Actual expense method: This method lets you claim the exact amounts spent on business-related home office expenses. While it requires keeping detailed records throughout the year, it can be more beneficial for businesses with significant expenses that exceed the fixed rate’s coverage. Detailed logs, receipts, and precise calculations of business use percentages are essential, so it’s worth consulting a tax professional to ensure you understand the process.

Proactive preparation for tax season

Small-business owners can avoid the last-minute scramble and ensure they maximise their deductions by adopting a few smart practices:

• Plan ahead: Tax time can sneak up on the best of us, so it can be helpful to schedule an appointment with a tax advisor well before the deadline to ensure you’re claiming all possible deductions.
• Stay organised: Have a system in place for categorising and organising your receipts and invoices throughout the year, as this will save you the stress of compiling it all right before lodging your return.
• Keep updated: Stay informed about changes in tax laws and seek professional advice to ensure compliance and optimisation of your deductions.

By mastering these strategies, small-business owners can turn home office expenses into valuable tax savings, making their operations more cost-effective and financially sustainable.

Note: This article is general in nature and has been prepared for informational purposes only. It does not take into account individual circumstances and does not constitute financial advice. For personal financial advice, please consult a professional tax adviser.

The post The small-business owner’s guide to home office tax savings appeared first on Inside Small Business.

When I started my business in 2015 as a ‘side hustle’, I had a full-time job that paid the bills. That was both a blessing and a curse because I didn’t depend on it for survival so I told myself the numbers weren’t that important. But what I did have from the very beginning was an amazing small-business accountant who helped me to understand my position, and what my numbers meant. And that full-time job I had was in state government where I was responsible for budgets and deadlines, accountable by processes and procedures, where everything had to be planned out to a T before it could be executed. This was a long way from the wedding floristry business I created, but definitely gave me a heads-up as a business owner. 

If you’re running a business on your own or with limited resources, the whole concept of ‘knowing your numbers’ might feel ridiculously overwhelming, but I assure you, it actually gets to be really simple, and sometimes it’s more about getting out of your head and getting it all on paper, making it crystal clear. Starting with understanding your baseline.

The first step is working out what it actually costs to run your business per year, alot of small and micro business owners understand what their product or service costs, but don’t consider the actual running costs of their business. The things like rent, power, water, insurance, phone, internet, vehicle registration, fuel and servicing, software and systems subscriptions, wages and superannuation, networking and marketing/advertising and any other expenses you have each year running your business. Once you’re clear on that you can assess what you need to bring in each month to cover your costs and what making a profit actually looks like for your business.

Another key piece of the puzzle is moving to an online accounting system like Xero or Myob where you can see the numbers in real time, reconcile expenses on the go and easily create and access reports. And even frolimitedm your dashboard you can see where you’re at for the month and how that track against previous months.

Reviewing your numbers regularly is what gives you the best handle on your finances and helps you to start identifying the trends in the income and expenses. Some people allocate this as a ‘Money Monday’ or a ‘Finance Friday’; a dedicated time each week to review the financial situation because where focus goes, energy flows. The more you understand what’s going in and out and why, the more power you have to do something about it. It’s not uncommon in the start-up stage of business to have losses, and it’s also not uncommon to have periods even as you grow in business where there are losses. However, frequently looking at your profit and loss statements in Xero or Myob helps you to understand why there’s a loss so that it’s not a shock when it ‘appears’. You might have invested in a new software or some new office equipment, you might have taken on a new software, you might have stopped production of a particular item. Loss is not the end of the world in business if you understand why, it’s there and have a plan to bring more profits long term.  Business is a long game, not a quick win. 

The post How to get your head out of the sand and use your numbers as your superpower appeared first on Inside Small Business.

It’s all in the foundations!

However, the reality is that one in five small businesses will fail within the first year, mainly because small business owners forget a vital part of starting a business – the importance of creating strong business foundations. To build a sustainable business with long-term growth,you need to be on top of the fundamental elements such as operations and people management, marketing and finances. They’re the key to long-term growth.

When it comes to achieving sustainable results, creating solid financial foundations means you’ll be more likely to set financial goals and make informed decisions about your business allowing you to weather challenges and adapt to changing circumstances.

But let’s be honest, the numbers aren’t sexy.

And once you’re at the coal face and time and resources are limited, it’s tempting to focus on the ‘fun’ stuff and forget the numbers altogether.

Simple steps to build solid foundations

Whether you’ve been in business for five minutes or five years, and no matter how big or small your team is, improving your financial foundations is easier than you think. Here are some practical ways to get started.

It’s all about success

Define what success means to you right now in this season of life and business. Once you know where you’re headed, create financial goals to help you reach your destination.

Get organised

To get your financial foundations in order, try these tips for getting organised:

• Set up business-only bank accounts. Start with three: an operating account, a tax and super savings account and a rainy-day account.
• Embrace tech to help you manage your money and save time – consider cloud accounting, budgeting apps or the humble spreadsheet.
• Create systems and processes for repetitive or regular tasks – from invoicing to running the payroll – get the information out of your head and on paper, especially if you want to outsource or scale.
• Incorporate a Money Monday or Finance Friday. Set aside an hour a week to focus on the finances – put it in the calendar and make it non-negotiable.

Get educated

Increase your money muscle and boost your confidence by increasing your financial literacy. Even if you ‘don’t do numbers’ or outsource, understanding the money-basics is key. Look for workshops, books, online courses or call in the experts for guidance.

The basics

Good cashflow is vital for good business, so create a cashflow forecast to help anticipate the business peaks and troughs – you’ll know when you can spend and when you need to save.

Create a budget to help allocate resources, track income and expenses and progress towards business goals. Know what taxes and other regulatory requirements apply to your business and make a note of reporting dates. While you’re at it, add a tax-saving line to your budget and save for compliance.

Regular pricing reviews are vital to increasing profit – consider the cost of doing business, wages and super in every review and always add profit. Make the profit and loss (P&L) statement your business BFF. Your P&L provides a business snapshot and can help you determine the next steps.

Solid financial foundations can help you create a profitable, sustainable and successful business and are vital for business owners who want to scale, sell or reach their potential. And, it’s never too late to get started!

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