We’ve heard the saying “Money often costs too much” and ask every business owner and he will swear by this. Successful businesses are always built on strong and sound financial management practices. A business which doesn’t have efficient ways of managing their finances usually struggles and sometimes these mistakes can be extremely damaging to businesses..
Below we have a look at the 8 mistakes which all accounting firms in Dubai will tell you to avoid:
• Your Operational Costs: Every business owner must be aware and understand the cost of running a business each month. An unrealistic understanding of this capital can hinder the businesses’ growth plans and goals. Creating a financial plan with costs, projections and forecasting are critical to creating a sound financial platform for every business.
• Keep your costs low: Until such time that profits is consistently achieved by the business, every business should keep their overheads low. These include number of staff, office furniture and equipment, technology spend and general expenditure. Any monies should be spent wisely on marketing and business development and any financial accountant managing your finances will tell you exactly that.
• Keep Track of Your Small Expenses: Whether it is toner for your printer or a stapler, as a new business owner, please make sure you maintain all expense receipts, regardless of how small the costs are. Many a times business owners fall prey on just focussing on the bigger expenses and not tracking the smaller ones. Your accountant will tell you no matter what the amount is when it comes to auditing every single Dirham counts.
• Don’t do everything yourself: Sometimes to keep costs low, many businesses owners try to do everything themselves. Although the DIY might seem the obvious solution it only is productive when you just start out and the operations and financials are small enough to manage. As you grow and the business grows your financial matters need dedicated and expert attention.
• Don’t mix finances: To ensure clean and simple financial records try not to mix business and personal finances- they are usually a recipe for disaster in the long run. Always use separate accounts for personal and business transactions and also maintain the financial records separately. When there are multiple expenses and transactions which are difficult to track things can get out of hand very quickly. A good accountant can give you sound advice on how to track and maintain business finances efficiently.
• Being on Top of Outstanding Payments: Although this is a no-brainer you would be surprised how many businesses struggle if their customers haven’t paid on time or paid at all. Make sure you follow up in a timely manner on all receivables and outstanding payments. Once you fall too behind on your receivables recovering it can be a challenging task.
• Doing Your Own Finances: Unless you have a certified accounting professional within your business do not attempt to handle the financial duties. Not only won’t you have the expertise to make sense of the financials, you may end up making costly errors which might be detrimental to your business. Some form of professional expertise and support in accounting and bookkeeping definitely recommended.
• Do not hire your uncle: You may have an uncle or a family member who has just prepared his personal financials or of his small business but this is no reason to hire is services unless he is a certified professional. Hire an independent accountant than your family members – this will bring in the required expertise, keep business matters confidential and also sometimes avoid a conflict of interest.
Don’t’ get consumed by these common mistakes and the best investment you can do to your business is get professional financial support and advice.