Managing business finances is very different from how personal financial management works. The management of business finance requires thoroughness. Management is also to keep you from spending too much money but still ready for all expenses.
Effective business finance management is a method to keep the company’s cash flow in order to avoid leakage. Unmanaged finances are very risky to the smooth running of business finances.
You can follow the following guidelines so that business funds are always controlled from time to time.
To do List in Managing Business Finances
Separate from Personal/Family Accounts with Business Accounts in Managing Business Finances
This is the first to-do list you should pay attention to. This is so that personal money is not mixed with company money.
The best solution is to open a new giro account immediately for business.
Determine The Percentage of Business Finance Management
Determining the amount of financial percentage that you will use for your business needs is the second to-do list.
Determine what percentage of money is for business operations, profit targets, business cash reserves and for business development.
Do not forget to allocate monthly expenses, including your salary. Although this is your own business, allocate your salary according to the responsibilities and figures of your needs. If you are forced to borrow business money, record it as a debt that you have to pay later.
Create a Bookkeeping to Manage Business Finances
Not enough effort you manage based on memory. There should be a complete record. Ideally, you have financial statements such as loss/profit and balance sheet. But if not yet possible at least you can create a cash flow statement.
Make a neat note to make it easier to evaluate the progress of the business.
Manage Business Finances by Reducing the Risk of Debt
As much as possible reduce the risk of your trade payables. Growing business by way of debt, it is permissible. But be careful with your debt. An additional debt repayment load in poor business financial condition will only worsen your business situation.
For that, if the income can not meet the needs of the business, reduce your debt risk.
Set aside Profit for Business Development
You are entitled to enjoy business profits, but not to ordain. You still have to set aside some profits for business development. One of the important tasks of financial management is to keep the business alive. That is by encouraging and directing investments into profitable areas.
Do not hesitate to ask for help from experts. Minimize any risks that could potentially frustrate your business.