Finance is one of the most important aspects of business management. However, its dry nature often allows it to sink to the bottom of the heap of essential business activities. If your finances are slipping out of your control, it’s time to buckle down and get back in command.
Keep Personal Finances Separate From Business
If you’re working with a small startup or operating your own one-person business, it’s easy to let your personal funds get mixed with your business finances. It’s crucial, however, that you keep these accounts completely separate. Establish a business banking account and a credit card dedicated to business expenses as soon as you launch your company.
When you’re working on your budgets, you should maintain separate documents and set distinct business and personal goals. While you want your small business to succeed for the sake of your own financial stability, making your home mortgage payment should have the same relationship to when and how you receive money from your business as it would if you were an employee.
Strengthen Your Budget
A solid budget is at the core of any strong company. You should specify exactly how much you’re planning to spend on all your business activities, from marketing to production to distribution. Keep careful track of your spending as you go, and compare your budget to your actual account activity often.
You should expect to find minor differences between projected and actual spending. However, you should take a very close look at your numbers if you’re consistently overspending or underearning. Don’t wait until you’re deep in the red to identify the problem. Get your expenses in line quickly if they’re slipping beyond the bounds of your budget.
Sharpen Your Tools
You can’t keep control of your business finances if you’re not using the right tools. First, make sure you’re working with a program that can meet all your accounting, invoicing, and finance needs. It’s crucial that you have access to intuitive reports and understandable interfaces. Sage One online accounting, for example, gives you custom invoices, clear statements, and real-time business insights.
Once you’ve chosen an accounting program, take the time to really familiarize yourself with it. Too many people work with applications that they’re not fully taking advantage of. Don’t miss out on the powerful benefits of niche tools. Invest some time in learning all the features of your program so that you can be in complete control of your finances.
Turn to a Consultant
If you’re running a small business without a dedicated finance and accounting department, you may need to turn to the services and expertise of professionals. There’s a great deal that you can manage yourself, but you shouldn’t exceed your level of knowledge. If you feel like your finances are slipping out of your control, call on an experienced consultant to get things back in line.”
Keep in mind that a consultant won’t take over your business finances or wrest control from you. The right consultant will simply give you some powerful insights and smart suggestions for the best way to handle your finances, both now and as your business grows.
Reexamine Your Processes
You can only tweak your finances so much by staring at finance reports. If your income and expenses aren’t where they should be, you should make a note of the numbers and move on to the bigger picture to discover where the real problem is. The solutions for your finances are often found in the sales department or on the production floor.
Step away from the desk to reexamine how you’re doing business at every stage. Are you wasting funds with inefficient processes in the assembly line, or are you spending too much on client acquisition while numbers of existing customers drop off? Monitoring production more closely with smart software or changing your business processes can directly affect your bottom line.
Keep your finances under control to ensure that you always have the funds you need to grow and progress. Using creative financial management and keeping a constant, close eye on your numbers can make the difference between stagnation and business success.