Become the financial manager of your own business

Financial management is the beating heart of any business but for a starter the focus is different than for a company that has been around for several decades. That’s only logical. Starters often underestimate the importance of solid financial management. It’s not that they don’t want to but they often lack either the time or input from people with a financial background to keep things on track. And that is absolutely crucial because a sudden lack of cash flow can easily put a premature end to your entrepreneurial aspirations.

A starter primarily needs to watch his cash flow and working capital. Established businesses also need to do this but to a lesser extent because they have years of routine in this regard. Cash management is important. As a starter it’s best to set up Key Performance Indicators (KPIs) at an early stage. They make it possible to measure financial objectives in a targeted way and set up streamlined budgets.

It’s important to keep a close eye on your working capital, preferably on a daily basis because if your capital drops too deep into the red, bankruptcy is just around the corner. The capital also determines how long your company can go on until the well runs dry. To assess your capital beforehand you need to get a clear picture of the revenue and, above all, the expenditures your activity involves. Thanks to these online financial tools, the latter is child’s play.

1. Xerius

Let’s start at the beginning, namely with the key question: how much will you make as a self-employed individual? Is it worth abandoning the safe cocoon of salaried work for the uncertainty of entrepreneurship? Xerius’ gross-net calculator will quickly tell you what you stand to make as a brand-new self-employed person.

But that’s not all: for starters this tool is much more useful e.g. to calculate your daily rate. That’s very practical if you want to know what your financial situation will look like at the end of the quarter or the year. The calculator can also be used to calculate the minimum number of working days needed to realise a specific turnover. Net salary, daily rates and days worked are three key parameters for your business. This tool is a very simple way of getting a handle on these key indicators.

Discover more on: Xerius

2. Salary Cost

Let’s start from the ultimate best-case scenario for a minute. You launched your business and orders are pouring in. In fact, they’re coming in so hard and fast that before long you are unable to cope on your own. You need a pair of extra hands, which means you’ll be hiring staff. If you want to know exactly what that will cost your business, this Securex tool is an easy way of calculating the salary cost for one to six employees.

Moreover, you get benefits for hiring your first employee: as a starting employer you get a 20% discount on advance tax payments and a lifelong exemption from employer’s contributions for that first employee. These are the so-called tax shift advantages. With Salary Cost you can obviously also calculate whether you are eligible.

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3. Tax Calc

Ever since Benjamin Franklin every American knows there are only two certainties in life: death and taxes. And yes, as an entrepreneur you are also required to contribute to the public tax interest - and not to the mortality rate! Have an accountant calculate how much you will have to pay in taxes for your self-employed activity.

It obviously makes a difference whether or not you’re working in a company. In addition to tax on income from commercial activities you will also have to pay personal income tax. Use the tax calculator of the Federal Public Service Finance to calculate how much you will owe as an entrepreneur.

Discover more on: Tax Calc

We wish you healthy finances!