An integral aspect of running a small business is financial management. Poor oversight of finances can damage your company, while astute money management can keep your business stable and spur further growth. Here are some helpful strategies for good financial management.
Form Sound Habits
Financial management is most efficient when it is habitual. For instance, schedule daily, weekly, and monthly blocks of time during which you review company finances. It’s important for you as a business owner to go over the books personally, even if you hire an accountant to assist you. Check outstanding accounts receivables, bank reconciliations, and other details that require close monitoring.
Have an Efficient Collection Process
Steady cash flow is essential for small business prosperity, and a crucial factor in this is an efficient billing strategy. Late-paying clients negatively impact your company’s ability to prosper and grow. To facilitate bill payment, have costs clearly delineated from the start. Send out invoices promptly as soon as goods are delivered or services performed. Offer discounts for early payment. If customers are late, sent polite reminders of payments due.
Monitor your company’s expenditures in terms of return on investment to clearly ascertain whether your investments are worthwhile. If you have difficulty coming up with your quarterly estimated tax payments, break them down into more manageable monthly payments. When allocating expenses, don’t forget to include a salary for yourself. This is an essential detail that new business owners often overlook in their zeal to help their company prosper.
Prepare for the Future
In the midst of the numerous expenses that are always present on a day-to-day basis, be sure to include future plans in your financial management. Envision where you want to see your company in five or 10 years, and set aside funds to help you accomplish these goals.
For more advice on small business financial management, get in touch with Fast Commercial Money.