Big Tips for Small Businesses: 5 Financial Strategies Every Business Owner Needs to Know

Keeping your finances in order isn’t always the easiest thing to do, even if you’re not a business owner. But when you tack on the extra responsibility that comes with accounting for the assets of your own company, the process of maintaining good standing finances gets a bit trickier.

To help you keep your company financially sound, here are a few tips you can use when accounting for your expenses:

1. Keep Detailed Records
   Keeping records of each of your expenses will be a big help for you when trying to account for tax deductible items down the road. Make this process easier for yourself by categorizing your receipts and even consider backing up this information digitally. Having your records available on a cloud network for instance will allow you easy access so that you can conveniently review your information when needed.
   
   
2. Separate Business Finances from Personal
   One of the easiest ways to create financial chaos for yourself is by allowing your business and personal bank accounts to overlap. Not only does using company funds for non-business expenses drain your revenue, but it will certainly make things more difficult when trying to discern between business and personal expenses later on. Avoid the unnecessary stress of this situation by keeping your bank accounts separate from the beginning.
   
   
3. Budgeting Is a Must
   Starting a business without first creating a budget and a forecast of your earnings is like starting down the road with no idea of where you’re going and when you want to get there. If you don’t give yourself specific direction on how much you’re going to spend and how much you want to be earning, you won’t get very far down the road to success. Create a budget and financial forecast from the beginning, giving yourself a framework as to what to expect monetarily during your first year in business. If you don’t plan, you may lose your way early on.
   
   
4. A Tight-Knit Team
   Keeping a small team is typically a good strategy when running a small to medium-sized business. As an owner, part of your role in the company is to manage funds in the most efficient way possible. By keeping down the size of your team and including only the positions you truly need, you’re able to keep your costs down. Aside from an employee’s salary, there are other expenses such as computers, workspace equipment, and training that can cost you money up front. Bring on the right people from the start and delegate responsibilities efficiently among your workers to help stay under your budget.
   
   
5. Cash Flow Management
   If a client owes you money, it’s your responsibility to stay up-to-date with how much you’re owed and when your customer is due to make a payment. Sometimes, you may need to follow up with an invoice, but be sure to maintain amicability with clients when doing so in order to sustain working relationships. Additionally, try making it easier for customers to pay bills by implementing online payment methods such as an electronic funds transfer.

Visit our Business Resources page for more tips to help you manage your company’s finances.