5 Ways to Manage Business Finances to be Effective
5 Ways to Manage Business Finances to be Effective
Are you the owner of a business? Or are you someone who is responsible for the finances of the company where you work? You will agree that managing finances is crucial in a business because this can reflect the extent to which a company can develop well, especially for small and medium-sized companies. The better the financial management of your business, the healthier it will be.
Manage business finances
Of course, it is different from personal because it requires special skills so that the company's financial management can run well. The following are some ways that can be done to manage the finances of a business, especially small and medium businesses:
1. Separating Personal Finance from Company
Even if you are the owner of the business, never assume that the company's money is personal money. Try to keep the two separate and make clear notes. Mixing personal and corporate finances, instead of making a profit, can result in a cash crunch.
2. Create two different accounts. Manage the two accounts differently according to your needs. Take advantage of the internet banking facilities provided by the bank to manage both. The important point in this issue is the discipline and commitment of how to manage the two accounts.
3. Use Financial Bookkeeping
Currently, there are various kinds of opening both manually and online. This bookkeeping helps manage between cash in and cash out. Recording can also be done accurately and carefully. Benefit with the most of today's bookkeeping applications to help you. Never get tired of checking every record. This is done to control money transactions and ensure that there are no errors.
4. Asset, Capital and Debt Control
Check regularly to make sure everything is in good condition. If you can't do this yourself, you can hire someone in the finance department who is qualified. These three conditions are very important for the smooth running of your business.
5. Reduce Risk
Risk can come at any time and from any activity, including finance. Ranging from small to big risks, everything you have to estimate before deciding to take it. Try to reduce risks such as borrowing debt, especially if the cash flow is not smooth. The risk of this debt also directly affects the financial health of your business. Large debt without money to pay it will only make debt interest accumulate which then further burdens the company's finances.
Controlling Cash
This is an important point and should not be ignored. Cash is the money you currently have. The funds in the cash account determine whether your company is able to pay all costs and obligations. such as paying building rent, employee salaries, other routine monthly bills to various obligations charged to the company.
A number of problems can arise if cash flow is not controlled properly. Pay close attention to the incoming and outgoing cash flows, don't let the cash outflows go faster than the cash inflows
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