Every business, from the smallest of start-ups all the way up to multi-national corporations, need to be heavily concerned with the movement of money. With the global economy and the future of your industry in a constant state of uncertainty, good financial management is crucial for success. If you’re finding that your finances are becoming overwhelming, here are some valuable tips for managing your small business’s finances.
Keep Personal and Business Separate
This is among the most common financial blunders made by inexperienced entrepreneurs, especially when their whole workforce consists of them and a couple of friends from uni! Keeping your business and personal finances wrapped up in a single account may be acceptable in the earliest stages, but as your business begins to develop and expand, you’ll need to get a business credit card, and divert all your related expenses onto it. This will make it much easier for you to keep track of your outlays, and maintain control of your firm’s cash flow. It’s also a smart move to open a savings account that’s dedicated to your business’s cash flow. There are certain exceptions to the rule, like if you invest in Forex in your own time and find a cheap Forex VPS that could double for business applications. Generally though, your personal and business finances should be kept well apart.
Use the Cloud
Yes, you can certainly download standard accounting software to help you manage your finances, and get by fairly well by sticking to it. However, one of these programs will never be able to give you the convenience and flexibility that you’d get from cloud-based software. Cloud-based accounting apps will give you access to all kinds of real-time insights, and the flexibility to store, track, update and access data from absolutely anywhere, provided you have a device and internet access. It’s highly dependable, and errors are exceptionally rare as well. If you’ve been running your business for some time and neglecting the cloud, you’ve got a lot of catching up to do!
Your cash flow may seem pretty stable right now, but it’s important to remember how many promising businesses fail in their early years. All small business owners need to be able to penny-pinch, all the while keeping up levels of customer satisfaction. Your fixed costs will be fairly easy to understand and budget for, no matter how large your business is or what niche it occupies. However, when it comes to variable costs, there’ll be much more room for savings. As an example, a lot of businesses make a pretty considerable investment in expensive branded software at the start of the venture, assuming that it’s going to give them the most for their money. Later, many of these companies discover a cheaper piece of cloud-based software which functions just as well, but only requires half the cost. Your ability to tighten belts will have a huge impact on your future success, so make sure you’re not neglecting opportunities to free up capital.