Regardless of how good your products and services are or how brilliant your marketing and sales team is, the long-term sustainability of your business depends on how well you can manage the finances of your business. Financial management goes far beyond just accounting, and when done well, it can ensure that your business never lacks the money for its operations and growth. Some practical and useful tip for managing business finances better:
Develop a Comprehensive Budget and Monitor It Religiously
Among the most important tasks for a business is developing the annual budget so that you can plan your income and expenditures. When you know what your expenses are likely to be at every stage of your sales curve, you will not only able to get on top of your cash flow but also access both short-term and long-term funding for your business. A budget also enables you to track your expenses and trim costs in case of overspending so that you can maximize your ROI.
Automate Bill Payments
Remembering the due dates of hundreds of bills every week and making the payments manually can be a big burden and it is easy to make mistakes. You can relieve yourself from this drudgery by implementing automated financial management and accounts software that requires only a one-time entry for each bill or credit card statement for it to be properly accounted for and the payment made automatically before the due date.
Maintain a Good Credit Score
The principal method by which financial institutions, partners, suppliers, or even key customers can establish if you are a solvent company and have a clean reputation for making payments on time is by examining your credit report and score. A good credit score adds to the company’s reputation and makes access to credit easier and cheaper, says Mike Giannulis. To have a good credit score, you need to not only access debt funds by way of loans and credit card due but also repay them on time. The better your record, the better your score!
Manage Your Debts Well, Recommends Michael Giannulis
Using debt to leverage sales is a perfectly valid tactic used by both large and small businesses. However, given the critical importance of making the debt repayments on time to avoid a negative impact on the credit score of the business, it is vital that you analyze whether you will be able to repay as scheduled before taking on the debt. If you are using your credit card for business expenses, you should preferably pay off the due amount in full on or before the due date. Paying back debts and creditors on time is for maintaining a good credit score and creditor relationships.
It is a digitally-connected world; it can help businesses to make their operations as paper-free as possible. However, even though moving data to the cloud makes management and access to information easier, it also lays the company open to cyber-security issues, including data breaches, unauthorized data manipulation, and digital fraud. You need to implement cyber-security protocols that can safeguard your data and prevent criminals from infiltrating your systems.