As a business owner or company finance manager, you have a lot of work to do.
Keeping the company afloat, profitable, and thriving is on your to-do list every day, and without any proper direction, you might be heading backward.
We all see far too many companies fold as a result of poor financial management, so we have a few great tips for you when it comes to intelligently managing your company’s finances.
Take a look below.
Upgrade your financial software
From financesonline.com: “A solid accounting foundation is key to growing the company. Accounting has always been an integral part of any business organization as it provides businesses with a view of their profitability or in some cases, losses. The process is likewise necessary for sound financial management, enabling businesses to keep expenditure and income records, which can be utilized in coming up with sound financial decisions.”
Failing to invest in new technologies can hurt your company in the long run, especially in this day and age when some of the most robust programs can ensure human error when running numbers is a thing of the past. More than that, today’s financial software can cut down the time you spend on accounting considerably, as many provide a holistic approach to finances that includes general ledger management, invoicing, payment processing, and streamlined processes and workflows that make finance management quick, easy, and mistake-free.
Have a plan for all investments
“A growing company should evaluate its current scenario and forecast its future roadmap ensuring fixed costs, variable costs, and expenses for contingencies,” writes business expert Kamalika De.
“With innovative technologies being adopted by competitor business, it becomes crucial to understand whether the investment is right for your organization. In case you are looking for investors funding your business, you should formulate the best business strategy and plan with short, medium and long-term goals.”
Negotiate wherever you can
First and foremost, you’re a company, which means you’re a business or B2B client to most vendors.
This position holds some sway over pricing of products and services because you’re more likely to turn into a long-term and high-paying customer. Use this to your advantage. Whether you’re interested in a few extra days or weeks to pay an invoice, or are looking for a 2 per cent or even 5 per cent discount on vendor products, then simply ask. There’s no harm in negotiating and it may even show your vendor or supplier that you’re potentially a long-term customer, which means a higher chance of success in your negotiating.
There are also ways to save when it comes to the software and/or tools you use to run your business. For instance, there are a number of ways to decrease invoicing fees on websites like Paypal or to get around such fees altogether!
Protect the business with insurance
You might not know it yet, but keeping your company finances safe requires you to take out some form of insurance.
If you’re liable for an accident or any other issue, an ex-client might sue you, which could deplete your entire company’s finances and leave you bankrupt. Insurance will prevent this almost entirely.
To make this easier, set aside a portion of profit each month or year and reinvest it back into insurance. You’ll likely not take too much of a hit with regards to profit and it’s certainly a must-have for businesses.
Build an emergency account
Arguably the most intelligent way to manage your company’s finances is by taking steps to ensure it’s able to survive tough market conditions.
Work to build an emergency savings account by setting aside all leftover profits that aren’t heading to employees, technology or inventory. You can slowly reduce the amount you save over time, however, start off as large as possible to get the account up and running.
Additionally, make it a priority to solely save in high-interest accounts. This way you’ll receive interest payments to work in conjunction with your savings.
Pay off bills and debt immediately
Just as you would with your phone bill, mortgage repayment, or any other serious bill, you should pay it off in full and right away. This way you’re not going to be slowly accumulating high interest or late payment fees – which can often be twice the size of the bill itself!
Additionally, from the moment you become profitable, it’s time to tackle your debts. Redirect as much profit or income as possible to paying off your debts as there’s a good chance you’re losing a lot of money to high-interest charges.
We suggest implementing reminder applications across all of your devices so that you’re able to see all of your upcoming bills at a glance.
If you find that you’re strapped for cash when a bill comes, it might be worth your while to use a short-term loan provider like CashnGo to pay the bill. This way your credit rating stays intact, you won’t be hit with late fees, and you’re not going to lose a service by neglecting the bill.
Launching and managing a business’s finances can be exciting and rewarding. However, being intelligent with your finances is essential.
You’re in it for the long term and being smart with where your money goes can be the difference between a business folding in hard times, and a business thriving.