Applying how to manage business finances properly is very important. Good financial planning is an important key to a successful and thriving business. However, there are still business actors who do not understand how to manage finances for small businesses properly and correctly. If left unchecked, this can affect financial conditions, and have a bad impact on the business being run. Due to having poor cash management, it is possible that the business being run has too much debt to the risk of causing business growth to decline. Here’s how to manage business finances so that the business runs smoother.
Make a general plan
One important step in running a business is to have a thorough plan. Careful planning will help us manage business finances so that the business we run does not deviate from the target. As a first step, we can start setting long-term goals. Then make a number of plans to be carried out in the next one or three months. Starting from this planning will help us calculate what costs are needed, in order to achieve the targets we have set.
Prepare income planning
We need to put together an income plan. At this stage we have to start estimating how to get income in order to meet the capital, and achieve all the planned targets. In order for incoming revenue to meet the target, of course we have to start estimating, to what strategy will be used so that sales can generate profits.
Record income and expenses
The purpose of recording income and expenses is to check and control every transaction in running this small business. It sounds inconvenient, but this method is also useful for monitoring whether there are leaking expenditures; not required. Not only that, recording income and expenses will also help us calculate the profits we get.
Pay bills on time
Paying bills on time is also a way to manage business finances that you can’t miss. Make it a habit to pay bills on time so that we are not subject to late fees. If one or two months late, the fine may still feel very light. However, if it continues to be allowed, the amount of fines will get bigger and affect the finances of the business that is being run.
Separate personal and business accounts
To make it easier to manage finances, make sure to separate personal and business accounts. Creating a separate account makes it easier for us to manage incoming and outgoing cash flows. In addition, creating a separate account also serves to minimize the risk of using business money for personal purposes.
Prepare an emergency fund
In running a business, we also have to keep preparing an emergency fund. Having an emergency fund is useful as a guide if something unexpected happens, and it has an impact on the business that we are running. Therefore, it is advisable to prepare an emergency fund, in anticipation of unexpected difficult things someday.