There’s no way to get around some of the challenges that come with being a small business owner. But the proper tools and support can help you navigate the world of debits and credits more smoothly. Here are a few financial challenges you may face and some small business finance tips for managing them.
Small Business Finance Tips
Many small business owners can become overwhelmed by trying to manage their cash flow. Of course, you know you need accurate and timely data to line up the resources to handle crucial transactions – such as payroll – when needed. And the longer you wait to sort out your cash flow, the greater the risk for a mistake or oversight that can potentially damage your financial reputation.
Accurate and timely financial statements are a must because they help you make important decisions and manage your fiscal obligations. They’re also a critical component to getting extra capital through a loan if needed. Unorganized financial records can be a red flag to lenders and may convey the wrong impression about the company’s fiscal health.
Having a modern, often cloud-based, accounting system is a staple of many well-run small businesses. In fact, helpful accounting apps have become quite popular because they integrate into a lot of other services for easier and more efficient use.
For example, if a sale is recorded in one department, a well-integrated accounting app can almost serve as a virtual employee and immediately make the necessary income or balance sheet adjustments to manage the transaction accordingly.
Small businesses should consider utilizing financial/accounting apps offered through their business bank or business credit card to help them keep their finances in check.
A Company Credit Card
Is a company credit card the right choice for your small business?
Naturally, there are pros and cons.
For example, a business credit card such as Ink from Chase helps keep personal and business expenses separate. The card also rewards spending. And those reward points are capital that can be easily re-invested into the business.
Burgeoning businesses can benefit from a business credit card too; this is a great way to establish credit and build financial stability.
Meeting the Challenge
Even the smallest of companies today have access to financial and accounting tools and resources that can rival those of a business twice their size. These technological advances are narrowing the accounting and financing gap for small businesses.
“Small businesses are strapped for time,” said Laura Miller, president of Ink from Chase. “The more we can bring together useful tools, the more we can help them be successful.”
In the absence of a fully-staffed financial department — or even a single dedicated person — a small business owner can rely on the numerous services offered by their financial institute or business cards to help navigate any financial management challenges they may have.
Do you have additional small business finance tips to share?
Money Image via Shutterstock
The secret is in tracking. Always track everything down to the last cent so that you know what comes in and what goes out in your business. That is the only way for you to really know how you are spending your money. Tracking is key.
I agree with Aira, can’t stress enough how important it is to know where your money is going. You can use an app for that or good old writing it all down, but write everything that goes in and out.
At times, business owners may not have time to do the stuff but they can actually outsource the function. But keeping accurate records is very important for every business.
I outsourced my phones to a 3rd party provider. The receptionist service filters out the sales calls and can pre-screen the question or issue the caller has to get them to the right person more efficiently.
Sometimes creating a budget for your business can be stressful, but without knowing where your spend your money, might lead you to a financial crisis. Having and sustaining a budget on a regular basis can help you track your expenses and anticipate your financial needs in the future. One tip also is to hire a certified financial planner if you have no experience when it comes to financial planning or if you don’t have enough time for such things.
I find that cash flow is King. If you don’t have the cash to do what you need to do you will go nowhere fast. I have found that too many small businesses don’t have a system in place to keep track of expenses and revenues. In fact, most small business owners don’t even know how to read a financial statement. By looking at your account receivables and finding ways to get your clients to pay you faster will increase your cash flow making it easier to achieve your objectives.
Amazing tips! Very short and sweet but very useful for everyone. I like the cash management tip, it is very important for every business needs to maintain the proper cash flow. Other tips are also very important for every businessman. Thank you for sharing this blog with us. Keep sharing.
Thanks for the information!!