Recently, Westpac published some interesting new financial research that holds valuable lessons for small businesses.

In a survey of Australians, the bank found that financial fitness was a top priority for this year, with Australians pledging to save a significant $21 billion over the course of the year. In fact, 85 per cent of those with New Year's resolutions focused on savings had a specific target in mind.

Head of Consumer Deposits at Westpac Elliot Smith explained that it was an encouraging development, and a clear plan of financial action was a good path forward.

Being financially fit is as important for businesses as it is consumers. Without a focus on building cash reserves or minimising expenditure, a company will quickly run into trouble.

Interestingly, Westpac also noted several ways Australians could work toward their savings targets – many of which hold true for businesses.

• Have a plan in place: Budget planning is essential regardless of industry, as it helps a business to understand possible upcoming expenses and income.
• Monitor spending: Having an idea of how money is spent day-to-day can identify unnecessary expenses. Recording this information means it's then easy to conduct internal audits further down the line.
• Allow for mistakes: While mistakes in the business realm are less easy to forgive, mistakes will always happen. The point is to identify the cause and work to prevent it from happening in the future.

Guidance from a government department

When Business Victoria came forward with a checklist for small business finances, the lessons held true. The department explained that a bookkeeping system was a key way to understand the exact state of finances, and pointed to budget creation as another key step.

Service costs should never be set in stone, according to Business Victoria. The department stated that profitable business will conduct reviews on a regular basis in order to make allowances for either rising costs or drops in sales.

Time to consider new software and training?

Upgrading to Jiwa Financials with the appropriate training could put your business on a path to better financial management. It's certainly something that can prove useful as a business continues to grow!

To learn more about best practices for small business finance, get in touch with the team here today.