The 17th May is National Numeracy Day and we are sharing 5 top tips to help you manage the money in your business. Don’t let the numbers get on top of you – they are just telling you the story of your business!
Click on the link below for your free downloadable PDF to keep for your reference. Please share them with any colleagues who may find them helpful:
Keep accurate records for all your sales and costs – Use an accounting software package or an accountants help to ensure that all your invoices and purchases are accurately organised and recorded. Keep this up to date on a weekly basis with a reconciliation to your bank balance so you have a clear record of your progress. Check if your accounting software will enable you to email in your invoices to make this easier.
Budgets and forecasts – Create an annual budget for your business on a month by month basis to show what sales you aim to achieve and what costs will be needed so that you have sufficient resources available when sales start growing! Review the budget plan on a regular basis and update with your latest forecasts so that you keep an eye on what you expect the future to bring – sales growth means you will need additional resources to keep the momentum going!
Regular reviews – With your accountants help, review your progress against your forecasts on a monthly basis. The monthly financial reports tell the story of your business – use these to reflect on what went well and how do you need to improve. If sales are more than planned – what created the extra demand and is this an ongoing trend you can build on? Monitor costs carefully and review your future forecasts – how will the high rates of inflation impact your current costs and should you increase your selling prices?
Cash is king! Prepare a cash flow forecast on a regular basis, realistically predict when customers will pay your invoices and when you will need to make payments to suppliers and staff. Don’t forget to include payments for PAYE, NI, VAT, pension contributions and corporation tax as well as capital expenditure. Always keep some cash in reserve for unexpected emergencies.
Pricing your products and services – With increasing costs, keep the costing of your products and services under regular review to ensure you really are covering all your costs. Don’t forget to include the overheads and fixed costs in your costings as well as the marginal costs. It is easy to underestimate the true cost of all your outgoings and the true value of your expertise!
arena4finance regularly provide training support for recognised industry bodies including the Institute of Hospitality, the MasterInnholders, TUCO and the European Clubs Association. Debra Adams, founder of arena4finance and a qualified accountant (CIMA), has been involved with the hospitality industry for almost 30 years and has delivered courses and training to numerous organisations in the hotel and restaurant sector including world renowned hotel schools such as Ecole Hotelier Lausanne and Glion Institute in Switzerland. She is the author of the highly acclaimed textbook 'Strategic Management Accounting for the Hospitality, Tourism and Leisure Industries'. She is also a regular speaker at hotel conferences and business seminars. Debra leads the team at arena4finance, who have had many years of experience developing and delivering one day, online and more extensive courses in hospitality finance for both finance professionals and operational heads of department in hotels, restaurants and leisure facilities. Our courses are powered by our online learning community resources at www.finance4hospitality.co.uk For more information about arena4finance, email [email protected] or visit our website www.finance4hospitality.co.uk
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