Introduction Every Entrepreneur knows why what it means to get paid. It is the fruits of managing business finances such as customers, product and services, cash, and collecting payments from the debtors. Actually the sale is not complete until the payment is received and all the activities one does from the moment a sale is made to collection of payments is the crucial finance management in business. It is important for the business owners to familiarize themselves with the basic bookkeeping, money management policies, accounts payable, accounts receivables, and tax obligations. Here then are some tips on how to manage your business finance:
Choose the best banker
The banking industry is now growing bringing new banks and banking methods to our doors steps. Having a bank with your proximity or a bank offering mobile banking platforms is an advantage. Depending on your size of business, it determines your cost making deposits and choice of your withdrawals. More so, a good Bank should be able to give account statement on regular basis as you require. It is crucial to your understanding of cash-flows, managing and safeguarding your cash. Create your business goals.
Lacking business goals is a journey to failure. Have budgets for your business which is also a measure of your performance when compared to actual performance. Having knowledge of where your business is coming from and where you are projecting it to go is quite important. Remember, if you projected to hit this much of sales turnover with certain costs level, then it will initiate investigation immediately your profits deviates.
Manage your receivables
Turnover levels are crucial to growing business. Credit sales are way of boosting business turnover and cannot be avoided. However, one can have cash sales incentives like quantity and cash discounts. Have well a communicated credit terms and a debt collection policy. Business receivables ties up working capital, therefore one can consider factoring or discounting receivables for immediate payments rather than waiting to maturity of invoice days. The cost of factoring can be cheaper compared to going for a shorter term loan from Bank; it also passes the cost of collecting the debt to the factor firm. Have a bookkeeper. This is also determined by the size of your business, large businesses will even have an Accountant. A trusted bookkeeper will documents, verify and keep safe custody all your business transaction. You will get periodic reports on time and with accuracy. Ensure to have a performance understanding with your bookkeeper should you engage one.