by Susan Paige
If you’re just starting out in business, one area that may be a cause of worry is how to manage your finances. Keeping your business afloat will mean that you need to exercise some great control over your business finances.
If you have very little experience in handling finances for small businesses, where do you even start?
With the right tips for small business management, it will be possible to run your business without too many financial concerns.
Here are five small business financial management tips to help you get things in order.
1. Don’t Mix Business and Personal Finances
You may have heard it said before that you shouldn’t mix your business and personal finances. If you’re lending your business money and borrowing it back whenever you need it, this is going to cause headaches when it comes to filing your taxes.
A much more sensible option is if you have completely separate bank accounts that you use for your business and personal use. That way, there won’t be any concerns or complications.
2. Pay Your Bills On Time
If you want to keep on top of your finances, you should pay your bills on time. Many people may argue that you should wait until you receive reminders. But by doing this, you’ll run the risk of incurring late fees if you miss the payment due date.
Get into the habit of paying your bills as you receive them. Think about setting up direct debits and standing orders to make sure these payments are made like clockwork
3. Pay Yourself
You may be inclined to put everything that you have into your business and to not draw a wage so that you can preserve profits. It’s important that you don’t do this. If you’re working for your business, you should be paid for it.
If you plow everything that you have into the business and don’t make a dime back, if everything fails, you’ll be left high and dry.
4. Be Frugal
You may see plenty of great opportunities for your business and believe in the line that you must speculate to accumulate. It is important to keep a level head on your spending and to only invest in sure-fire things.
Throwing your money away on risky investments when you have a low turnover could be catastrophic.
Keep your spending tight under control, and only buy what you need.
5. Keep an Eye on Your Books
If you keep an eye on what’s coming into your business and what’s going out, then you’ll not go far wrong.
Having some basic accountancy skills will take you far. However, if this is beyond you, make sure and hire an accounting services company to handle your books.
What Are Your Small Business Financial Management Tips?
Taking an interest in the finances of your small business is essential. If you’re not paying attention then you’re not in control and things will go wrong.
How do you keep on top of your small business finances and what are your small business financial management tips?
For more tips on managing your money, check out the rest of the articles on this site.