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How to Manage Business Finance

Business is an investment that is quite important and a good way to make money. In doing business, it is very important to have the ability to manage finances to avoid losses or even the possibility of bankruptcy. Not only that, understanding the right way to manage finances in a business or business can give you other benefits. Then, how to manage finances in a good business? Below are some ways that you can keep your business financial flow healthy.

How to Manage Business Finance
How to Manage Business Finance

1. Record All Expenses

The first, in managing business finances is to track and record all expenses and manage books properly. You can get around this by keeping all evidence of income and expenses that occur during the business process. You can do it manually or you can be assisted by using various accounting software or hiring a good accountant.

2. Making Financial Projections

It is important to make financial projections of what may happen in the business. How to? It can be done by making expenditure plans for the next period. That way, you can get various financial priorities in a certain period so that you can anticipate and avoid unexpected expenses that are outside the plan that can make expenses swell.

3. Keep Personal and Business Finances Separate

This is the most important thing about how to manage finances in a business or business, namely by separating personal and business financial accounts. Because it can make it easier for you to track the company's cash flow, where you can find out which expenses or income you get for personal or business matters.

Maybe you've heard of cases of business money being used for the personal needs of the business owner, and even worse, it's not known exactly how much money was used. As a result, the business capital owned is reduced imperceptibly and has an impact on the business being run. This problem is the most common or dominant cause of business failure.

4. Pay All Bills On Time

Bills do not mean that the profits obtained will decrease, especially if they are related to business operations. Which means it's the bills that keep the business going. So, so that business finances run smoothly and are not biased, get in the habit of paying the bill immediately and don't delay it so you don't forget and even make bills pile up. You can also avoid the obligation to pay additional late fee penalties for not paying on time. It may sound trivial, but the fines can be quite large and affect business operations.

5. Calculate Income and Profit in Detail

Getting profit or profit is the main goal of doing business. Unfortunately there are still many entrepreneurs who do not calculate profits properly and correctly. Though this is very important to measure the extent to which your business can run well. When calculating income and profits, make sure all costs have been calculated in detail. Don't forget to calculate depreciation costs, tax costs, and other interest so you can see how much net profit your business has over a certain period.

6. Minimize Travel Costs

Travel is often included in the business process, for example meeting clients or becoming suppliers out of town. This will not be a problem as long as you pay attention to keeping the travel costs to a minimum in order to remain economical and maintain business financial stability. Organize your trip well, rent accommodation that is comfortable but still economical so that your business trip doesn't cost too much.

7. Pay Attention to Contract Agreements with Third Parties

The involvement of third parties in running a business certainly exists so that the business grows and gets bigger. With a third party, businesses can be helped both in the production process and during decision making, especially those that affect the financial management of your business. It is recommended to make this third party either as a supervisor or to fully hand over the matter of business financial management. And also sometimes using the services of a third party can make expenses increase, therefore always pay close attention to the contract agreement that has been made.

8. Monitor Financial Cash Flow

When running a business, you need to regularly monitor financial cash flow. Sometimes this is the most difficult thing for business actors to do because it requires a fairly high level of accuracy. If you have difficulty controlling financial cash flow, you can use the services of an administrator to control cash flow and establish good financial procedures. You can also use accounting software if you don't want to spend too much money on hiring these services.

9 . Use Profits to Grow Your Business

Profit is the most awaited income for business actors because it is considered as a measure of the success of a business. If your business is already making regular profits, immediately turn profits into something productive, such as business development. For example buying additional company fleets or adding product variants. Do not immediately spend the profits earned for personal purposes.