Page 192 - Budgeting for Managers

Small Business Money Management
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Time, Money, and Peace of Mind
Many small business owners try to avoid spending money.
Being careful about money is important, but it’s not the only issue.
When we choose not to spend money, we need to do the work our-
selves. But, having free time to solve problems and grow the business
is essential. So, it may be better to hire help to do routine work. It’s
easier to find reliable bookkeepers and accountants than to find spe-
cialists in your business area. So, it makes sense to hire help for finan-
cial management.
There’s one other issue that affects some business owners—stress.
If we become too stressed, we lose time for work. Even if we don’t
actually get sick, we have a hard time focusing and thinking clearly. If
having a professional take care of the books will help you relax and
stop worrying about keeping track of the money or about finding the
time to pay the bills, then that money to hire professional support is
well spent.
tell if your bookkeeper is doing a good job. Also, you can evalu-
ate the books and do a better job planning your business.
If you want to save both time and money, plan to meet with
your accountant at least once a year. Have the accountant
review your budget and account codes. He or she may recom-
mend using different account categories that will save you
money on taxes or may make other suggestions. Also, go over
your financial statements for the past year along with your taxes
so that you understand them thoroughly.

Seasonal Fluctuation and Available Cash

Companies have ups and downs, and some of them are pre-
dictable. If you are in a seasonal business, then be sure to plan
ways of having enough money to get through the low periods.
There are several options to consider:

• A line of credit. This is a revolving loan. You can borrow
whatever you need up to the maximum of the credit line,
you pay interest only on what you borrow, and you can
pay it back as soon as you have the money, even if you
need to borrow it again the next month. Classically, lines