As a small business owner, you’re juggling many different tasks. Luckily, managing your finances doesn’t have to be one of them. Although there may be aspects of running a business that isn’t exactly fun (like doing taxes), you should take advantage of software and other tools that can help make things easier. Here are some tips for managing your new business finances.
Cash Flow Management
Cash flow management is the management of the cash that flows into, through, and out of your business. It is a measure of how well you are managing your finances.
Cash flow is essential because it tells you where the money came from (income), where it went (expenses), and whether or not there was anything left over at the end of the month to pay yourself or reinvest in the company.
A positive cash flow means that more money came in than went out of your business; this could result from increased sales or decreased expenses. Negative cash flow indicates that more money went out than came in; this could be due to bad luck, poor management choices, or both.
Pay Yourself First
The first step to managing your finances is to pay yourself first.
Paying yourself before you pay the bills means that money goes into your account, and it is then used for things like:
- Building your business
- Building your retirement
- Building an emergency fund
- Contributing to the college fund of your kids or grandkids
And for other priorities important to you and necessary for living life on your terms, such as working toward home improvements or paying off debt.
Choosing an exemplary business banking service can be a lifesaver, especially starting. Look for a bank convenient to you (and your employees), has a good reputation, and offers the services you need. You can also find investment technology that can simplify your fund administration process.
Financial Goal Setting
As you begin to manage your new business finances, it is important to set financial goals. Goals are the milestones that you want to achieve in your business. For example, think about how many sales you want to make this month or what amount of money you would like to make by the end of the year.
You can then break down these goals into smaller ones to be more manageable and attainable. These smaller goals will help keep things on track when trying to accomplish those larger ones!
Financial goal setting doesn’t have to take a lot of time out of each day since they should only take a few minutes here and there once everything else has been taken care of first (like paying bills). You can also use tools like Excel spreadsheets/calendars, which will make tracking progress much more accessible than keeping track with pen & paper because they’ll show all previous data too.
Outsourcing Your Accounting
Outsourcing your accounting can be a great way to free yourself up from the daily tasks of keeping track of your finances.
- You should start with a small project, then build up over time as you get more comfortable with outsourcing.
- Outsourcing can be cost-effective and save you time that you can use elsewhere in your business.
Protecting Your Business From Fraud
In the financial world, many ways to protect your business against fraudulent activity exist. Some of these activities include:
- Implementing internal policies to prevent theft
- Checking employee backgrounds before hiring them (criminal history, credit reports, etc.)
- Auditing accounts regularly and reporting suspicious activity immediately.
New technology can make financial goals much more attainable. Making it easier to reach your financial goals. Gone are the days of waiting for your next paycheck and making do with what’s in your bank account because now you can use apps that help you manage cash flow, set financial goals, and track your business banking.
No matter where you are or what time it is, technology allows you to work on improving your financial health from anywhere at any time. Whether you’re just starting or have been in business for years, there are many ways that technology can help you manage your finances.
Set up automated systems to ensure you stay on top of your cash flow and payroll. Use an app that can track where all your money is going, and consider outsourcing specific tasks like accounting if it makes sense for you.