7 Steps How To Manage Business Finance
Managing finance is one of the important things to think about when you want to start a business. Unfortunately, there are still many business people out there who suffer losses simply because they are unable to manage business finances properly. In this article, we will provide several ways on how to manage business finance.
1. Determining Percentage in Financial Management
How to manage business finance well? The first thing that needs to be done is to determine what percentage of money is allocated for. Also manage what percentage of profit targets to be achieved, what percentage of money for cash reserves of the business. And also what percentage of money for business development. By determining a percentage, you can more easily manage finances in accordance. Of course with the portion that was determined at the beginning of starting a business.
2. Negotiate Before Signing the Contract
Sometimes, you have to dig for a good offer. When making a purchase from a vendor or contract with a supplier, try negotiating with the supplier for a better deal. Always check the terms of purchase. Such as fines and grace periods when making a decision. By negotiating, sometimes you will be able to get the best offer. So that you save more and maintain the financial stability of the business.
3. Doing a Cash Spin
Don’t just focus on profit. How to manage business finance also includes how you manage debt, receivables, and inventories. Many businesses have cash difficulties. Even though their accounting records show good numbers. Consider how to manage your company’s cash flow. However, if your business has experienced cash flow problems, do these 4 ways to improve your company’s cash flow.
4. Pay Bills On Time
You need to pay all the business bills on time. Set up monthly reminders to make sure no business bills are due. Avoiding late payment of fees can maintain business finances well.
5. Reducing the Risk of Debt
As much as possible reduce the risk of debt in running your business. Developing a business by way of debt is indeed permissible. However, you still have to be careful with debt. The additional burden of debt installments in unfavorable financial conditions will only worsen business conditions.
6. Planning for Business Development
You have the right to enjoy the benefits of the business. But that does not mean you can just spend it. You still have to set aside some of the profits for business development. Proper business development is one form of investment that needs to be done.
7. Make Financial Bookkeeping
How to manage business finance is not enough to be managed only based on human memory. Need for complete records. For example, such as making financial reports, both profit and loss statements and balance sheets. Try to record all transactions in simple bookkeeping. Thus, you can control all of your business financial transactions. Also, making bookkeeping will make it easier for you to evaluate business development.
These are the seven ways how to manage business finance. The more you understand business finance, the more prepared you are to make smart decisions in managing finances. The most important thing is that you can minimize any risk that has the potential to harm the business and you can continue to learn to develop the business better.