You can be flat out with work and still wonder where the money has gone. Customers are buying, the diary is full, and yet paying yourself feels difficult. Then a supplier invoice arrives or an annual subscription renews, and the bank balance looks thinner than expected.
In a recent LinkedIn post, Akshay Sharma of Candid Books highlighted five money mistakes he sees among business owners. They are familiar problems, often easy to put off when there is work to deliver. Here is a closer look at each one and what is worth checking in your own business.
1 Leaving yourself out of the budget
When you own the business, it is easy to put everyone else first. Suppliers get paid, staff get paid, and you take whatever is left. For a while, that may feel like part of getting established. Over time, though, it becomes hard to tell whether the business is genuinely supporting you.
Put your own financial needs into the planning conversation. Work out what you need to take home, what the business can afford, and how you will review the gap if those figures do not match.
How you pay yourself depends on the business structure, so check the arrangement with your accountant. The point is to make a deliberate plan rather than leave your income to chance.
2 Setting prices just to be cheaper
A low quote can win the job. It does not necessarily make the job worth doing.
Before you match a competitor’s price, look at what delivery actually costs you. Include preparation, administration and follow-up, not just the hours the customer sees. Software, insurance and other overheads still need to be covered.
Take one recent job and compare the quote with the time and costs it actually involved. Did extra revisions eat into the margin? Was the scope clear? Sometimes the answer is a price increase. Sometimes it is a better-defined service or a change to how the work is done.
Customers need to understand what they are paying for. Being clear about the value you provide is more useful than trying to be the cheapest option for everyone.
3 Growing without enough cash behind you
A bigger order or a new client is good news, but it can create costs before it brings money into the bank. You may need to buy stock, engage help or pay suppliers well before the customer pays you.
Before committing to the next stage of growth, map out that timing. Add the new costs to your existing obligations and check what happens if sales are slower than expected or a payment arrives late.
The right cash buffer will depend on the business. A cash-flow forecast gives you something concrete to discuss with your accountant, rather than relying on a healthy-looking sales figure.
4 Letting unpaid invoices drift
Chasing payment can feel awkward, especially when you know the customer well. But leaving an invoice untouched does not make it any easier to collect.
Set payment expectations before starting the work, then invoice promptly. Make the due date and payment details clear. Set aside time each week to check what is outstanding, rather than waiting until cash is tight.
A friendly reminder is often a useful first step. Check that the invoice reached the right person, ask whether there is a query, and establish when payment is expected. For larger projects, consider agreeing on a deposit or staged payments at the outset.
5 Paying for subscriptions you no longer use
A tool signed up for during a busy month. An extra software licence after a team change. A trial that quietly became a paid subscription. Individually, these costs may not attract much attention. Together, they can become a regular drain.
Akshay suggests reviewing subscriptions each quarter. Go through the recurring charges on your bank and card statements, and ask who uses each service, what it does, and whether another tool already covers the same job.
Check annual renewals as well as monthly payments. Before cancelling, confirm whether the service holds records you need or supports an important process. You may be able to remove unused licences or move to a smaller plan instead.
These checks do not need to become a major project. Start with the issue you recognise most readily: an overdue invoice, a service that takes longer than you quote for, or a subscription nobody can explain. Fixing that one thing gives you a useful place to begin.
General information only. Speak with your accountant about your circumstances.
About the Author
Akshay Sharma is an accountant at Candid Books Accounting & Taxation Services. He helps business owners and individuals manage their finances with personalised accounting and taxation support.
To contact Akshay Sharma, click here.