While there can be many different challenges when starting and handling a small business, cash concerns top the list for most small business owners. There are many approaches you can give your small business a financial fix with the help of adjusting your business operations processes; however there are some easy things you can do in the daily management of your business to improve your business finances. These guidelines are practical, daily moves you can take to manage your cash more effectively.
- Keep Business and Personal Expenses Separate
There are lots of reasons not to mix your business and personal accounts, consisting of tax issues, personal liability, and jumbled accounting statistics, just to name a few. When matters get tough, resist the need to get your small business funding with personal funds as it will certainly create a large amount of mess that you will need to address afterward.
The excellent way to maintain clear separation of your expenses is to set a personal budget and a business budget. Stick to them strictly and strictly so that credit cards and loans for your small business don’t get used for your personal finances and contrary.
- Negotiate Before Signing Contract
Every now and then you need to dig a little for a good bargain. When purchasing or contracting with the suppliers, try to negotiate for a better deal. Don’t forget to analyze purchase terms such as late payment penalties and grace periods when making a decision. Sometimes being given an extra 30 days to pay can save you more than a 5% discount.
- Make Repayments Timely
Just like with your personal finances, it is important that you pay all of your commercial payments diligently. Credit card and loan payment late fees can cost you extremely, but paying small late fees on vendor and utility bills consistently adds up, as well. The same is going for taxes: paying late can bring serious consequences.
Set up monthly reminders to make certain that there are no business payments falling through the cracks. For young businesses primarily, the profit/loss margins are thin. Avoiding the late fees could be the difference between ending the year in the debt or in positive earnings.
Stay Economical With Money
You don’t need to be a cash saver to save cash on regular business expenses. Follow through on mail-in rebate offers for office equipment and supplies, purchase furniture and major equipment secondhand, and go green to save cash on utilities.
- Know the Basics of Accounting
Being a small business owner doesn’t make you an expert with financials, but you’ll still need to make big financial decisions for your business. So even in case you hire an accountant, you need to know the basics of business accounting and for that you need to take a basic accounting course from a local university or online. The more you know your business finances and cash flow, the better prepared you will be to make cash management decisions.