When you are doing the bookkeeping for Gold Coast business, do you set aside funds in a savings account?
As Gold Coast bookkeepers, we ask the question: “How Much Are You Saving?”
In the current economic climate on the Gold Coast, the idea of having any month left at the end of the money can seem a distant memory to some small business owners
One way that your Gold Coast business can make a profit is by a very simple principle – spend more money than you make, and save some of what’s left over, which can be easier said than done. Financial gurus may suggest that businesses should have savings in the bank equivalent to between six and nine months of income.
There’s many sub contractors working in the building industry that were enjoying the benefit of higher incomes durig the Gold Coast property boom, and probably wished that they had put some of those funds away “for a rainy day”.
When you start to think that a business that is grossing $250,000 per month should have savings of over $1.5 million dollars, the idea can seem like a fantasy.
There’s businesses on the Gold Coast that have no savings plan in place, so when the unexpected happens, you are unprepared. A basic bookkeeping principle of our Port Gold Coast bookkeepers is to save just 10 % of your income.
You may find the first month a little uncomfortable in tightening your spending, but soon you’ll begin to get used to the idea of your Port Hedland business putting money away each month.
The first place for the small business owner to even begin a prudent savings program for long-term success is by revising your budgets and cashflow forecasts. Make a decision to include a 10% account in the bookkeeping of your Gold Coast business.
Building savings allows you to plan for future growth in your business and have ready the investment capital necessary to launch those plans. Having a source of back-up income can often carry a business through a rough time.
When market fluctuations, such as the dramatic increase in power and water prices, start to affect your business, you may need to dip into your savings to keep operations running smoothly until the difficulties pass.
Savings can also support seasonal businesses with the ability to purchase inventory and cover payroll until the flush of new cash arrives. Try to remember that you didn’t build your business overnight and you cannot build a savings account instantly either.
Review your bookkeeping each month and see where you can trim expenses and transfer the savings to a separate account. This will also help to keep you on track with cash flow and other financial issues.
While it can be quite alarming to see your cash flowing outward with seemingly no end in sight, it’s better to see it happening and put corrective measures into place, rather than discovering your losses five or six months too late.
If you’re having trouble with your bookkeeping to save for your Gold Coast business, contact us today and we’ll help you move forward.