Get your business financially fit for the future

As the owner of a growing business, managing your finances can be daunting on top of everythingelse. However, with the right tools, strategies and support, you can be ready for that next ‘event’,whether that be raising investment, applying for bank funding or changing your shareholder base.Here are some essential financial practices that can help you manage your business moreeffectively and ensure long-term growth.

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1. Have a Forecast/Budget Model: A robust forecast / budget model is the cornerstone of financial planning. It allows you to projectfuture revenues, expenses, profits, and cashflow, helping you make informed decisions. Byregularly updating your forecast, you can spot potential financial challenges and opportunities,holding the right people accountable for performance ensures your business stays on track andyou have visibility of funding needs well in advance.
2. Have a Cashflow Forecast: Cashflow is the lifeblood of any business, and the biggest cause of owner sleep-loss! You canhave a long-term cashflow in your forecast model above, but a short-term weekly cashflow reallyopens your eyes to the immediate priorities. It will help you predict when cash will come in and goout, allowing you to manage your cash effectively. It’s crucial for avoiding cash shortages andensuring that you can meet your financial obligations (e.g. debt, tax etc.). Regularly reviewing yourcashflow forecast can help you adjust your spending and investment plans.
3. Have the Right Financial Tech Stack: Growing is painful, don’t let the finance systems make that harder. Using the right systems earlywill mean they can scale with you and automate as much of your finances as possible.Here’s my go-to tech stack for finances:‍‍
   • • Xero - Don’t bother with other accounting systems. The tech that can integrate with it makes it themost powerful system out there for small to medium-sized businesses.‍
     • Float - That short-term cashflow above visualised, simplified and integrated with Xero. I use thiswith all my clients
     • ScaleXP - If you have recurring revenue and/or lots of prepayments and accruals, this is amassive timesaver and adds huge commercial visibility.
     • Scott’s add-ins - This is a relatively new one to me, but pulling data straight from Xero into Excelis a dream!‍
     • Dext - Automating transaction processing takes the pain out of bills to pay. It also has approvalsand expenses built in.
4. Maintain Your Cap Table: A capitalisation table (cap table) is a record of your company's ownership structure. It details theequity ownership of shareholders, including founders, investors, and employees. Maintaining anaccurate cap table is essential for managing your equity and ensuring that you can make informeddecisions about fundraising and ownership dilution.
5. Commercial Calendar: A commercial calendar helps track important business events that have affected your financialsmonthly. A very simple table of the month and the financial highlights in 2-3 bullets is all you need.When looking back over monthly financials in a fundraising due diligence exercise, having this infoalready to hand shows you know your numbers and infinitely speeds up a process.
6. Company Details Log: Maintain a company details log to keep track of important information about your business. This logshould include details such as:
   • Companies House details with authentication code and Webfiling login.
   • Company registration number.
   • PAYE Accounts Office & Employer references.
   • Corporation Tax UTR & Tax Office No
   • VAT registration number and relevant dates (Effective reg date & 1st return date).• Government Gateway logins.
   • Pension details & Pension Regulator details.
7. Accounting Calendar: An accounting calendar helps you keep track of important financial deadlines, such as filing datesfor accounts, confirmation statements, VAT & tax returns. By staying on top of these deadlines, youcan avoid penalties and ensure that your financial records are accurate and up-to-date
8. Data Room: A well-organised data room is essential for managing your business's financial information. Itshould contain all relevant documents, such as financial statements, tax returns, and contracts.Having a centralised repository for your financial data makes it easier to access and shareinformation with stakeholders, such as investors and auditors.

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Implementing these financial practices can significantly enhance your business's financialreadiness for that next ‘Event’.

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