Position yourself for recovery by streamlining your financial systems
By Gerri Detweiler
Organizing your finances may be the last thing on your mind right now, especially if your business is just struggling to survive. “So many food-based businesses are pivoting right now, and pivoting in multiple directions. Caterers are no different,” says Kristy McDonough, a consultant who helps food-based businesses make more money by developing and systematizing new revenue streams.
Yet the last few months demonstrated that businesses with well-organized financial systems have found it easier to get help through COVID-19 relief loans and other assistance programs. When the economy moves into recovery, those businesses will also be at a significant advantage.
Here are five expert tips to help you organize and streamline your business finances.
1. Update and Organize Your POS System
Make sure your POS and invoicing system is up-to-date and provides you with the insights you need to manage your business. “If you are pivoting to meal kits, grocery boxes or even a boxed lunch that you’ve never offered before, create new categories for these items in your POS or invoicing system,” recommends McDonough. “With so many moving parts, it is important to know exactly where your sales are coming from. This will also tell you what is working and what may not be. In the end, it should provide some direction on where to focus your energy and effort for the greatest success.”
2. Multiply Your Bank Accounts
At a minimum you want a business bank account to separate your business and personal finances. Better yet, use multiple accounts, suggests Sylvia Inks, business and financial coach at SMI Financial Coaching, and author of Small Business Finance Book for the Busy Entrepreneur.
“Have four business bank accounts to manage the money coming into and out of the business,” she says. “Having a dedicated business bank account—for operating expenses, taxes, emergency fund and long-term savings—will help you make more informed purchasing decisions, and you’ll never run out of money to pay taxes, bills and yourself.”
3. Streamline and Automate
“If you dread a task, like paying your bills, then you won’t feel any incentive to spend more time on the task,” warns Belinda Rosenblum, CPA, and founder of OwnYourMoney.com. “However, this is a huge mistake that many business owners make. In just a few extra minutes, you can streamline the time needed to pay bills with some simple one-time automations.”
Rosenblum says she pays just one bill a month—and gets points or cash back on “nearly everything”—by setting up automatic payments to be paid by her credit card or bank account. “If you can’t pay off the balance each month, then at least automate the minimum credit card payment to avoid late fees and dings on your credit,” she recommends. That can protect both your business and personal credit. “There are enough decisions to make in your catering business every day,” she says. “What to pay from which account doesn’t need to be one of them!”
4. Track Your Revenue Streams
Businesses with multiple revenue streams are more likely to survive a downturn. But if you aren’t tracking each revenue stream, you may not know where to double-down. “If you want to maximize your revenue and your profit, you need to be tracking each major revenue source,” Rosenblum says. “Although this may seem like more work at first, it will simplify your decisions as to where to focus your marketing and sales efforts, once you know how to make your money work smarter for you.”
5. Get the Right Help
You can’t do everything in your business, and while you need to stay on top of your finances, you don’t have to do it all yourself. “Sometimes the easiest way to make finances simple is to get them off your plate,” suggests Katherine Pomerantz, money mentor and accountant for creative business owners. “If you don’t have a strong business or accounting background, then finding a freelance bookkeeper to take over some of your admin work will allow you to focus on what you do best. You can find an online freelance bookkeeper for a few hundred dollars a month, and their expertise will be invaluable.”
