Three Money Management Tips For Small Businesses In 2022

The start of a new year is usually a great opportunity to take a step back, look at what you’ve been doing and think about how to do better. After everything that’s happened since the end of 2019, many businesses will be looking to rebuild. Honing your money management is likely to be crucial to your success. With that in mind, here are three tips to help.

Move to digital

In some business sectors, you may still be pretty much obliged to take cash and checks. Generally, however, you should try to steer customers towards digital payments if you possibly can. The transaction fees are generally more than outweighed by their security and convenience.

Similarly, you should move as much of your money management onto digital as you possibly can. For example, if you’re staying loyal to “old-school” banking, then at least research the alternatives (DigitalSupermarket can help here).  

Likewise, if you’re still doing bookkeeping on paper, or even digital spreadsheets, it’s probably time to invest in proper accounting software. Even free software is likely to be better than spreadsheets. Paid-for packages are, however, often worth the money for the extra functionality they offer.

Brush up your payment systems

If you’re taking payment in advance, then your priorities should normally be security and avoiding returns/bad reviews. In general, the easiest way to protect your physical security is to stick to digital payments (as much as possible).  

Make sure you understand the rules about taking these and stick to them. This limits the potential for fraud, including customer fraud, such as unreasonable claims. It also maximizes your ability to respond to them if they are raised.  

In particular, make sure that you inform the customer of exactly what they are buying before the sale. This not only protects you from claims but also vastly reduces your chance of having items returned and/or getting a bad review. For completeness, if you do get a bad review then respond to it politely. That way people also get to see your side of the story.

If you’re invoicing in arrears, then make sure that you run an effective invoicing process. At a minimum, ensure that you’re always sending your invoices to the right person at the right time. Also, make sure that your invoices contain all the information somebody needs to approve them. If possible, get a payment method on file so you can bill them automatically rather than having to wait for them to pay.

Get to grips with analytics

Even SMBs can and usually should apply analytics to their business as much as possible. Taking decisions based on real-world data is almost always better than making decisions based on “your gut”. They might bring you to the same conclusion but at least you know why.

At a minimum, SMBs should be using analytics to get the most out of their marketing budget. For example, you should be looking to find the keywords which deliver the most value for money. Focusing specifically on them usually generates the best returns at the lowest cost. Similarly, you should be aiming to identify your key traffic drivers so you can prioritize them.