7 Financial Habits That Help Build a Stronger Business

Running a successful business is not just about winning more customers or increasing sales.

Long-term success is built on the small financial decisions you make every day. Businesses that consistently improve profitability, manage cashflow and avoid unnecessary financial stress usually develop strong financial habits.

Good financial habits help you make better decisions, prepare for tax and remain in control of your company’s finances. Merranti’s small-business accounting support is designed to help owners understand their numbers and receive ongoing advice rather than only hearing from an accountant at year-end.

1. Review your finances every week

Spend time each week reviewing:

• Bank balances.
• Outstanding invoices.
• Upcoming bills.
• Recent expenditure.
• Tax liabilities.
• Short-term cashflow.

Do not rely solely on the amount currently shown in your bank account. Up-to-date reporting provides a more accurate view of how the business is performing.

For a broader overview of the financial support available, visit Merranti’s accountancy services page.

2. Separate tax money immediately

Not every pound in the company bank account is available to spend.

Money may already be needed for:

• Corporation Tax.
• VAT.
• PAYE.
• Employer National Insurance.
• Self Assessment payments.

Consider transferring estimated tax liabilities into a separate savings account. This reduces the risk of using money that will later be needed for HMRC.

3. Keep your bookkeeping up to date

Accurate bookkeeping helps you:

• Understand profitability.
• Monitor business spending.
• Identify overdue invoices.
• Prepare reliable forecasts.
• Complete VAT and tax returns.
• Make decisions using current information.

Leaving bookkeeping until year-end means problems may go unnoticed for months.

Merranti provides bookkeeping support for businesses using systems including QuickBooks, Xero, Sage, Excel and paper-based records.

4. Use accounting software effectively

Cloud accounting can give business owners access to current financial information rather than waiting for historic reports.

It can also make it easier to:

• Match transactions.
• Store receipts.
• Raise invoices.
• Monitor customer debts.
• Share information with your accountant.
• Review performance from different devices.

Read more about accounting software and how online systems can improve access to financial data and collaboration with your accountant.

5. Review your prices regularly

Costs increase over time.

If your prices remain unchanged while wages, suppliers, insurance and software become more expensive, your profit margins will gradually decline.

Review whether your prices still cover:

• Direct costs.
• Staff time.
• Overheads.
• Administration.
• Business risk.
• Required profit.

A pricing review should be based on your own costs and margins rather than simply copying competitors.

6. Chase invoices promptly

Late-paying customers can create cashflow pressure even when the business is profitable.

Build a routine that includes:

• Raising invoices immediately.
• Setting clear payment terms.
• Sending reminders.
• Reviewing overdue invoices weekly.
• Following up disputed amounts.
• Requesting deposits where appropriate.

Good bookkeeping and management information make it much easier to identify outstanding balances before they become serious problems.

Regular cashflow analysis can also help identify potential pressure before it becomes urgent.

7. Speak to your accountant throughout the year

Accountants can provide more value before a financial decision is made than after the year has ended.

Regular discussions can help with:

• Tax planning.
• Cashflow forecasting.
• Pricing.
• Recruitment.
• Business investment.
• Company structure.
• Profit extraction.
• Future growth.

Merranti’s approach is based on providing ongoing accounting and business advice rather than only preparing statutory accounts.

Common financial habits to avoid

Avoid:

• Spending money reserved for tax.
• Mixing personal and business transactions.
• Ignoring overdue invoices.
• Reviewing figures only once a year.
• Making decisions based solely on the bank balance.
• Leaving bookkeeping several months behind.
• Taking dividends without reviewing cashflow.
• Failing to plan for major purchases.

Final thoughts

Strong businesses are built through consistent financial discipline.

Reviewing your numbers, keeping accurate records, setting aside tax and speaking to your accountant throughout the year can improve financial control and reduce unnecessary surprises.

Merranti Accounting supports businesses with bookkeeping, accounting software, statutory accounts, tax planning and ongoing business advice.

Written by Steve Watts ACMA

Steve Watts is Accounting Director at Merranti Accounting and a Chartered Management Accountant.

Steve qualified as a CIMA accountant in 1995 and has more than 20 years of commercial finance and accounting experience.

His background includes housebuilding, serviced accommodation, property investment and development, joint ventures and wider commercial finance. At Merranti Accounting, Steve supports business owners with financial strategy, management accounts, Corporation Tax, VAT, payroll, tax returns and business planning.

Steve’s approach focuses on helping clients understand what their figures mean and use that information to make better decisions throughout the year.

For business owners, developing strong financial habits — from keeping bookkeeping current to monitoring cashflow and planning ahead for tax — can provide much greater control than waiting until the annual accounts are prepared.

Read more about Steve Watts and his experience or connect with Steve on LinkedIn.