A guide to managing your business finances

1 June 2023

6 min read

Please be aware that this is a guide only and you should seek specific advice for your business*

When you're running a business, it can sometimes feel challenging to juggle everything at once. Not only do you need to manage staff, serve your customers and keep operations running smoothly, you also need a good grip on your business finances.

In this guide we take you through the steps you need to take as a business owner to stay on top of your finances – from what to think about when opening a business bank account, to keeping on top of your bookkeeping and cash flow.

You can also watch our webinar on financial support for your business, which features a wide range of support for small businesses, provided by a leading panel of experts.

Opening a business bank account

Deciding which business bank account is right for you is crucial to managing your finances effectively. You need a bank account that you can rely on, and that meets all of your business banking needs. When searching for the business banking account, there are several factors you may want to consider:

  • Fees and charges: Look at whether the account comes with free business banking for a set period, as this could help reduce your costs as there's no monthly fee or charges if you maintain minimum required credit balance. Compare costs like monthly account charges, cash deposit fees, withdrawal fees and charges for foreign transactions.
  • Online banking: Having easy, 24-hour access to a bank account is important when you're busy with meetings and the everyday running of your business, so check if the account comes with online banking and mobile banking.
  • Card payments: Check if the account offers card payment services. This is becoming increasingly important as more consumers and businesses go cashless. The Co-operative Bank offers card payment services to business banking customers through our partner Fiserv (previously known as First Data).
  • Customer support: Look into the support options available from the bank should you face financial difficulties. Is it easy to speak to an adviser and access customer support when you need to? At The Co-operative Bank, we have a range of contact and support options for all your business banking queries.

For more guidance, you can read our article on choosing the right business bank account.

Manage your bookkeeping

Accurate bookkeeping is essential for helping you manage your cash flow, prepare balance sheets and plan your business growth strategy. Bookkeeping involves recording and organising all of your financial transactions, including every time a customer makes a payment or you pay your suppliers, staff and other expenses. You can hire an accountant to manage your bookkeeping software or do it yourself, either manually or using accounting software.

To find an accountant suitable for your needs, look for those that are a member of a recognised accountancy body, such as ICAEW (Institute of Chartered Accountants in England & Wales) or ACCA (Association of Chartered Certified Accountants). Also, look for those that provide all the services you require and have clients that are a similar size and trade to yours as they are more likely to be up to date with regulation changes that affect your business.

Some business owners prefer to carry out some bookkeeping tasks themselves, but then use a professional for services such as payroll or VAT.

At The Co-operative Bank we are proud to partner with the Federation of Small Businesses, a trusted organisation providing small businesses with advice and support. More information on how to manage your bookkeeping is provided by the FSB, as well as many other business resources.

How to manage your cash flow

Managing your cash flow is vital to the financial health of your business, as it will affect your ability to cover your costs and invest in your business plan. Your cash flow situation could also have a negative impact on your business credit rating if you are struggling to pay back loans and other debts, which could then affect your company's ability to secure new lines of credit and competitive terms from lenders and suppliers.

Read our in-depth guide for more information on how to manage cash flow.

Business financing options

There are many financial options available for businesses, so do your research carefully and choose the one that is appropriate or best fits your business financing needs. The suitability of a particular type of finance will depend on a range of factors, including the maturity of your business, your existing liabilities and your short and long-term needs.

If you're considering whether your business needs financing, ask yourself a few questions:

  • Do I really need funding?
  • Which type of funding is best/appropriate for my business?
  • How do I get funding?
  • How quickly do I plan to pay it back?

Some of the financing options available for small businesses include:

  • Bank loans, overdrafts and credit cards
  • Growth finance
  • Asset finance
  • Invoice finance
  • Trade finance
  • Small business grants

More information on finance options is provided by the Federation of Small Businesses.

Further resources to support you and your business

At The Co-operative Bank we care about you and your business, which is why we've created a number of useful guides to help you manage your business finances.

If you'd like to learn more about creating a business continuity plan, our guide can provide support.

If you'd like support on invoicing, you can find our guide on chasing unpaid invoices.

If understanding asset management is something you'd like to learn more about, then we've created a guide for you here.

For more helpful support and resources, our Business Exchange hosts a wide range of content tailored to you and your business.

*While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by The Co-operative Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. This is merely a guide and each business is unique in its requirements. Specific advice should always be sought in each instance.