Many business owners today struggle to keep their business afloat while tracking business finances. It is very important to know how to unlock more finances for the business so that you can avoid problems with the cash flow. It is necessary to learn how to balance what you owe and what you are expecting from your debtors. Below are some tips on how to manage the business finance to avoid problems.
- Manage cash flow. It is important that you keep your debtors under notice to follow deadlines so that you can also keep deadlines. The people who owe the business should pay on time as agreed so that you can also pay the party you owe from (if there is) like the bank or your suppliers, and keep the business running.
- Bookkeeping. It is the act of recording business transactions as part of accounting in the business. It is very important that you write down or you have a software that will help you track down what goes in and what goes out, how much you owe and how much you are owed with. If the business owner cannot do the records, they can hire a trusted person to do that for them.
- Mobile Payments. Depending on the country you are in, you can request your debtors to pay you via mobile payment to accelerate cash flow easily. This will help you get your business cash fast without delay in case the debtor is far from you. Also, some banks do allow transaction via mobile phones.
- Managing the business credit is important in order to find a credible bank or local credit union you can trust in times of business credit need. Most banks offer mentorship and advice in times of need. If you have a loan from them and you are not doing so well in your business, they can offer an overdraft and advices on ways you can get out of trouble. If you are not able to pay on time, let them know so that they don’t term you as a defaulter destroying your credibility. Try as much as possible to keep the terms of the loan to avoid your business rating going down.
- Keep your credit policy high. Remember that your business relies on the cash flow so when you borrow or give out by debt, it is important to consider deadlines to keep the business running. Cash flow is the bloodline of your business so remember to pay your creditors on time as agreed and remind your debtors to do the same.
- Financial Planning. When you buy goods to sell and you need to add more stock or expand, it is important to plan on the financial implications of what you are going to do. Especially expanding by adding another business branch, do a survey first and understand if the first business will be able to support the expansion before it starts making any profits to support itself.