Hishem AzzouzHost Of Recruitment Mentors Podcast

Smart Finance Tips for Small Businesses

Name: Smart Finance Tips for Small Businesses
Uploaded: 2024-07-31T16:00:04+00:00
Duration: 52 s
Channel: Hishem Azzouz
Description: In this segment, the speaker emphasizes the importance of financial discipline for small‑business owners. He recommends adopting a “pots” system—separate…

31 Jul 2024 · 1 min

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In this segment, the speaker emphasizes the importance of financial discipline for small‑business owners. He recommends adopting a “pots” system—separate accounts for VAT/corporate tax, salaries, marketing, and rainy‑day reserves—where a fixed percentage (VAT plus an additional 20%) is automatically allocated whenever an invoice is received. He also stresses maintaining a simple cash‑flow forecast, leveraging accounting dashboards such as Xero, and reviewing the forecast regularly: a few times per week for solo operators and almost daily once staff are involved. The advice is presented as practical, low‑complexity steps that can be implemented immediately to improve cash‑flow visibility and tax compliance.

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Is there anything there that I can just get a bit more discipline on the finance side? Discipline is definitely the word, and you are not alone in that. Starling, Monzo, they all have pots, you know, set up 5 or 6 pots, one for VAT and corp tax, you know, one for salaries, one for marketing spend, rainy day stuff. So just start having that kind of pots mentality where, you know, every time you get an invoice in, you, you know, your VAT plus 20% is going into that VAT and that corp tax pot. Have a cash flow forecast. Again, all these things have dashboards, don't they? So Xero's got your dashboard if you keep it up to date, of course. Yeah. So have that cash flow forecast in front of you and have that kind of— it can be as simple as you like. You don't have to, you know, run away with it. But I would recommend looking at it a couple of times a week if it's just you. And then once you've got someone on board, you want to be looking at that almost daily to check.