All companies are concerned with making money – that’s no question. But are all companies doing everything they can to make wise financial decisions that not only lead to more profit but save them money through the process? Most likely, no. Practicing correct finance is one of the most critical aspects of managing and maintaining a successful company. Despite what we want to believe, it takes a lot more than just a good idea to run a business. Every business, especially small business, needs a stable financial structure that generates profit to maintain credibility. Here are some tips for practicing good finance!
1. School Yourself
You should first start with educating yourself on the various aspects of finance. You can do this by taking a course or researching online. It is essential that you learn to read financial statements. It tells you everything you need to know about your finances and includes a cash flow statement, income statement, balance sheet, and statement of shareholders’ equity. If you don’t know any of these terms, it is important to learn them!
2. Always Separate Your Personal Finances from Business Finances
This is Finance 101! Get a credit card strictly for business and make sure you only use it for that purpose. This will lead to you making wiser decisions when it comes to the money you spend and track your outlays. You should also open a business-only savings account and transfer a certain amount to it each month that you can use to pay taxes at the end of the year.
3. Don’t Overspend
Cut any unnecessary costs. There are two types of costs for businesses- fixed and variable. The variable aspect is where you have the potential to save yourself some money! For example, opt for a free online platform in which you can hold meetings that would have before required you to travel long distances. Saving on travel expenses can give you some extra wiggle room!
4. Consider Using Cloud-Based Accounting
You can download regular accounting software to manage your finances. However, it won’t afford you the convenience that cloud-based accounting software will. Making the switch to web-based software will give you real-time insight and allow you the opportunity to store, update, access and track data at any time- from anywhere.
Follow these tips and take the steps necessary to make better financial decisions for the successful future of your business.
Nick Zamucen is the founder of Bio-One Inc., the first successful franchised crime scene and hoarding clean-up company and the founder of B.O.R. Restoration, the first restoration company that will collect insurance invoices for franchises. He’s also a published author, business strategist, and award-winning serial entrepreneur. Read more on his entrepreneurship advice or check out his Twitter!