If you’re an entrepreneur, the world is your oyster. Building a brand is fun and exciting and getting new clients or selling products or services gives you such a thrill. But there’s also a lot of paperwork you have to keep track of and even more importantly: you also have to keep track of your budget. Because even if you’re bringing in big contracts, if you spend even more, you’ll end up in trouble. In this article, we talk about 4 ways to keep track of your budget and the profit you make.
1.Get a good accountant
Accountancy is a job, but also quite a talent. While a good accountant might cost a pretty penny, it also lifts a lot of work from your shoulders. A good accountant can keep track of your expenses and profits. He or she can also tell you exactly how much you’re making and whether you’re spending too much.
2.Stay on top of debtors
If your accountant mentions to you that one or more of your clients aren’t paying (in time), it’s important to take action straight away. The best course of action is calling your clients up to ask why your payment is tardy. Often this is a mistake and not malicious intent.
If it’s impossible to reach your debtor, there might be something going on. Maybe it is malicious intent and they’re trying to avoid paying their invoices. In that case, it’s a good idea to pop by a debt collection agency (Dutch: incassobureau) to ask for advice. Hiring a debt collection agency (Dutch: incassobureau inschakelen) is often more effective than trying to reach your debtor day after day. A collection agency can find out who’s behind a difficult corporate structure if you don’t know who you can contact to get your invoice paid. Even more: often they can call in a bailiff (Dutch: deurwaarder inschakelen), who in turn can enforce payment by, for instance, seizing someone’s belongings.
3.Give yourself a monthly ‘fun-fee’
Especially when you’re first starting out, it might be tempting to spend a lot of money on tiny things. Maybe you see a fun vase, that would look só good on your table. Or a cute briefcase, ideal to use when you’re visiting clients. You get the gist. Before you know it, you’ve spent a lot of money on things you didn’t really need. There’s nothing wrong with treating yourself, but giving yourself a monthly budget might be a good idea to stop yourself from splurging on everything fun you see.
4.Start looking at the future
As an entrepreneur, you can’t only live in the now and hope your accountant calls you up when something’s not going well. It’s important to have a plan for the future too. Make sure you have a business plan that shows how much you want to make in the next year, the next five years and how you want your business to grow. Don’t forget to implement new lines of business, inflation and the cost of planned hiring in your business plan. If you’ve never made a business plan before, it might be handy to hire an external consultant to help you with this. Maybe your accountant can even help you!