Starting and managing a business comes with challenges, and money management is among these. As a business owner, there are certainly lots of ways you can give your business financial overhaul. Usually, it calls for business processes modification. Meanwhile, you can start with tweaking day-to-day actions to improve your business’ finances.
Whether you are on a shoestring budget or not, taking these daily actions can help you manage your business cash flow.
Money Management Tip #1: Never Mix Personal and Business Expenses
Obviously, there are a lot of reasons why you shouldn’t mix your personal and business financial accounts. Just think about having tax issues, jumbled accounting records, and increased personal liability. Even if your business gets tight, you still shouldn’t use your personal funds to finance it. Otherwise, you will have to deal with this mess later on.
Once you decide to start your business, set aside separate business and personal budgets. Then follow your distinct budget at all cost. Besides, you will make it easier for your Bookkeeper and Accountant to manage your books and pay your dues come tax season.
Money Management Tip #2: Negotiate with Suppliers Prior to Signing A Contract
Getting a good deal often is not easy. You have to dig a little deeper to score one. So, before you sign any contract, make sure you have negotiated for the best deal that they can offer you. Likewise, be keen with different purchase terms. These include late payment penalties, grace periods, etc. For example, it pays to check whether a 30-day grace period can be more beneficial than a 5% outright payment for goods or services. Always weigh your options.
Money Management Tip #3: Always Pay your Bills on Time
As a business and financial management coach, I encourage my clients to pay their bills diligently. This applies to their financial obligations both personal and business wise. Besides, there are late payment fees on loans, credit cards, and utilities. These small extra costs add up. There are also penalties for late tax payments, so make sure that you check that too. Set up monthly alarms or reminders so you don’t miss out any due date. This is extremely helpful to startup businesses with thin profit-loss margin.
Money Management Tip #4: Frugality is a Good Thing
This doesn’t mean that you have to be an extreme couponer to lessen your operating expenses. This simply means availing email offers from your suppliers, purchasing secondhand equipment, going paperless or strawless, etc.
Money Management Tip #5: Take Introductory Accounting Classes
If accounting, business management, or banking and finance is not your major or forte, you can consider enrolling in introductory or crash courses. After all, you are dealing with major money decisions in your business. Having an Accountant and a Bookkeeper does not mean that you should leave all the numbers to them. It pays to understand the basics of business accounting and bookkeeping. You can check out online courses of short courses offered at your community college.
Hire A Financial Management Consultant Today!
Understanding how business finances and cash flow work will help you make wise money decisions. While these tips are surely handy, having firsthand knowledge of this matter is extremely important. Now, if you want to learn the basics of money management on a one-on-one setting, I suggest you consider hiring your own Financial Management Coach. Book your NO COST Strategy Session now and see if we are a good fit.