If you're reading this, I'm earning money. Thanks for helping to feed my family. Please see our disclosure for more information. Also, any advice provided is for informational purposes only. I'm not a CPA, lawyer, or doctor, although my parents wanted me to be all three. So, talk to a professional before acting on anything you read below.
If you run your own small business, you probably understand that the customers are not the only thing that keeps you going. You may have plenty of money coming into your business, but until you know how to manage your funds, you’ll never have a truly secure operation.
Money management is especially important when your operation is small, because the margin for profit is probably not as favorable as a big business. Here are a few helpful tips to get your business on the right track when it comes to managing money.
Get a qualified bookkeeper
Hiring a bookkeeper for your business is an excellent investment. With a trained and certified public accountant, you won’t have to worry about managing your payroll, tax preparations, accounts payable, accounts receivable, and much more.
It’s worth the investment to get a few extra winks at night, not worrying about your organization’s finances. CPAs are also qualified to help your business in legal matters regarding your money as well.
Create a cash flow budget
Creating a cash flow budget for your business will help to ensure that you know where your organization’s money is going, and where it is coming from. Managing your finances proactively will make it easier to keep your business running.
A few of the most common components included in a well-rounded cash flow budget are accounts receivable, cost of goods, debt repayments, and operating expenses. Research more ways to create a functional budget for your business, and get to work today.
Don’t mix personal and business finances
Never mix the business finances with your personal finances. Mixing the two blurs boundaries for yourself and those with whom you work. Don’t put your personal life at risk for the organization.
Design separate business and personal budget outlines, so business loans don’t get used for personal payments and vice versa. Your CPA will thank you when it comes time to sort finances for tax purposes.
Always negotiate with vendors before signing a contract
Never take a vendors offer at face value. Vendors are accustomed to bargaining with clients, so don’t just settle for the first offer thrown on the table.
Examine terms like late payment penalties and grace periods for making key decisions. Try to dig for a better bargain. The worst they can do is say no.
Make frugality the standard for your business
Frugality should be the standard for all you do with your business. There is a distinct difference between cheap and frugal. Cheap suggests low quality.
Frugal suggests being careful with your spending. Make wise and conservative decisions with your products and operating services on a daily basis in the interest of saving as much money as possible.