financialtreat – will explain about How to Manage Business or Company Finances You Should Know which you will get in the following article. let’s look at this article carefully!
How to manage and manage business finance or the company can continue to grow and get finances? Check these tips. A healthy business requires good financial management.
The amount of income and expenditure must be balanced, not only managing business finance but also understanding the importance of managing cash flow and how to keep the cash flow smooth. Therefore, you need to know some tips and tricks for managing finances in business as follows.
How to Manage Business or Company Finances You Should Know
Determining the Percentage in Financial Management
To manage finances well, the first thing that needs to be done is to determine what percentage of the money is allocated for business operations. What percentage of the profit target you want to achieve, what percentage of money is for business cash reserves, and what percentage of money is for business development.
Negotiate Before Signing Contract
Sometimes, you have to dig for a good offer. When making a purchase from a vendor or contracting with a supplier, try to negotiate with the supplier for a better deal. Don’t forget to check the terms of purchase such as fines and grace periods when making your decision.
Paying Bills On Time
It is important for you to pay all business bills on time. Set up monthly reminders to ensure that no business bills are overdue. Avoiding late payment of fees can maintain business finances well.
Reducing Debt Risk
As much as possible reduce the risk of debt in running your business. It is permissible to develop a business by way of debt. However, you still have to be careful with debt.
Planning Business Development
You have the right to enjoy the benefits of a business, but that doesn’t mean you can just spend it. You still have to set aside some of the profits for business development. The right business development is one form of investment that needs to be made.
Making Financial Bookkeeping
It’s not enough to run a business based on human memory. Complete records are required. For example, such as making financial reports, whether it’s an income statement or balance sheet. Try recording all transactions into simple books.
Make an Annual Evaluation
Making financial evaluations is an ultimate goal of documenting flows in a period. There are 2 reasons why a financial evaluation should be carried out. First, the financial evaluation will show a company’s achievements over a period.
Second, financial evaluation can also show the company’s spending patterns in a period. If there are many shortcomings, then you can take corrective steps in the next period.
Determine the Time Period
To manage company finances better you need to separate by time period. Starting from making a general plan for the business with a program that will be carried out for one period. Then, make a detailed requirement of each program.
If you have made the details of the program, divide it into several categories of implementation time. Starting from daily, weekly and monthly expenses for the short term. Expenses with 1 to 3 years in the future for the long term.
Create an Income Plan as a Way to Manage Business Finances
To start a job requires a good plan. However, if the planning is not carried out fully, the results obtained will certainly not be optimal. It is not impossible that it will cause losses.
Therefore, to manage finances, a plan is needed to manage income. Think about which products can produce for your company. Determine how much can be produced, look at market segments and determine your sales target.
Don’t forget to develop a more mature marketing strategy so that you can achieve the target as planned.
Separate Between Personal Assets and Company Assets
One thing that often makes business people fail in their business is to consider the money they get from their business as their personal money. This perception is not wrong if the business is owned by an individual.
This habit sometimes makes the business fail. For example, the costs that should be for production are used to finance personal needs. This is what makes the business lack of capital.
The thing you can do is to do the bookkeeping so that it can help you see the company’s financial cash flow and of course with this bookkeeping you can separate it from your personal and business needs.
In addition, you can also separate your personal finances and business finances using a bank by creating a business account and a personal account. By doing this, all transactions from your business have clearer documentation.
Manage Cash Flow
Previously we discussed a bit about the importance of managing cash flow better. A business certainly needs funds to keep it running. These funds are used to finance the business for purposes such as financing employee salaries, production needs and others.
No matter how much income your business receives, but if most of the income is in the form of receivables, then over time the business operations will experience problems.
This is why cash flow management is so important in a business. When managing finances, make sure all records are matched with purchase notes or other proof of expenses.
After recording expenses, you must also document the income. Both details of these funds can later be used to make a financial balance sheet. From making the balance sheet, you can find out how good the finances are in the company.
If the cash flow is already smooth, you still have to do regular and periodic monitoring. Strive for all existing bills to be paid so that it does not become a problem in the company’s finances.
Understanding Accounting (business finance)
When you want to manage finances in a company, you need someone who clearly understands finances. For this reason, business people need to understand the basic science and principles of accounting or at least look for an accountant who is truly an expert in this field.
By understanding accounting, it is hoped that the business owned can have better financial management. Also read about simple bookkeeping software to help with accounting.
Prioritize Company Needs
Remember this theory is that income must be greater than expenditure. Not only that, business people must also be careful in choosing which ones the company needs and which ones don’t. This is in order to reduce company expenses, too much expenditure compared to income will create an unbalanced cash flow.
Therefore, try to prioritize the needs that are really needed by the company. For example, such as company expenses for office rent. You can try this to find an office with an affordable and comfortable price, no need to look for a luxurious office.
Set aside company income for business development (business finance)
That doesn’t mean you can’t enjoy the profits that come from your business, it would be wise if you can manage these profit funds to become your business development fund.
One of the important tasks of financial management is to keep the business growing and developing. The more developed your business is, the more income you will receive. Therefore, set aside some of your business income to develop your business.
Read more financial management:
Prepare an Emergency Fund (business finance)
Every business that is run will certainly not run smoothly as everything has been planned. We will certainly experience one or two problems, such as a decrease in turnover due to the emergence of competitors and several other things that require you to think hard to solve them.
One way to anticipate this is to have an emergency fund. These funds can later be used for urgent needs. If you face a problem that makes a big loss in a company, you can use this emergency fund to again make your company stable and you can still run the business.
Well, you can apply the 9 ways above to manage finances, both for your company and for your business. The development of companies in every corner of the region that is experiencing a rapid increase will also be your obstacle, but if you can manage your finances well.
In order for your financial management system to be better you need to use a financial application, you can use the best Journal accounting software to help manage various kinds of financial reports that your company has.
By using online accounting software from the Journal, you can create invoices, and annual reports, to tax arrangements, anywhere and anytime.