Top tips to help manage your finances
Are you self-employed and wondering how to get on top of your finances? Money management can sometimes feel like a minefield, especially when you’re getting to grips with a new business.
Our Finance Specialist, Shahin Chowdhury, has listed his top tips to help improve your finances and get in control of your money.
Separate personal and business finance
Open separate bank accounts and credit cards to help organise your financial transactions and make preparing for tax and self-assessment easier.
Track your income and expenses
Use accounting software or spreadsheets to maintain accurate records and gain a clear understanding of your financial health.
Create a budget that outlines your anticipated income and expenses
This will help you make informed financial decisions and prioritise spend based on business goals.
Set aside money for taxes
Estimate quarterly tax payments and maintain a separate tax savings account so you’re prepared to fulfil tax obligations without financial strain.
Save for emergencies and retirement
Allocate a portion of your income to an emergency fund and explore retirement savings options. To ensure a stable future, it is recommended that at least 10% of your income be saved towards your pension.
Invoice promptly and follow up on payments
Maintain a healthy cash flow by sending out invoices promptly after completing work and use a system to follow up on outstanding payments.
Manage cash flow effectively
Keep track of money owed by clients and the money you owe suppliers. Negotiate payment terms with suppliers that are beneficial to your cash flow and use strategies to avoid late payments or unpaid bills.
Funding and grants
There are plenty of grants available that consider your personal situation and the type of business you have, like Community Interest Companies (CIC) and charities. These grants aim to offer support and financial help to those who are eligible. If you are in financial difficulties, then you can apply for an occupational grant if you work or worked in a specific occupation.