Running a business is always focused on increasing sales and getting the best possible profit. However, there are things that many business people often forget to achieve success, namely managing finances to continue running their business. How to manage business finances can be started from managing the capital you have and the profits you get.
The risk of loss will still exist as long as you run the business. However, all of that can be minimized with good financial management. In fact, it is not impossible that the benefits that can be obtained can be maximized.
Those of you who want to have good financial arrangements can listen to how to manage business finances below:
Adjusting to the form of business
How to manage finances must be adjusted to what kind of business is run. You as a micro business actor may not need financial management like a large company. Micro and small businesses may only need a book or application for recording financial reports to do all of this.
Even so, the basics of financial management that are carried out must still be measurable and disciplined. Organized by properly recording income and expenses. Discipline in keeping records every day.
Separate personal money and business money
The most basic thing in starting a business is to separate the money that will be used for business and personal money for daily needs. You must know the amount of allocation of personal money that will be used for business.
After that, separate the two financial posts in different accounts. So, you know which money to use for business matters and which money to use for personal needs. When one money post runs out, you may not take money from another post.
Make a general financial plan
A general financial plan will contain the amount of business capital and expenses required at the start. After that, build short, medium and long term plans. Insert targets that will be included in each plan.
Make calculations by looking at the value of the product and the targeted market. Don’t forget to set the target for the start of the calculation as well as the end of the calculation to be used as evaluation material.
Make budgeting for every business need
Budgeting is financial planning for a need. In business, this plan can be used to buy raw materials, pay employee salaries, pay routine bills, as well as marketing strategies. However, all forms of budgeting must be specific and controlled.
Make this budgeting a limit in all business activities. This means that expenses made should not exceed the financial planning at the beginning. However, that does not mean that lower allocations have a good impact.
If there are expenses that are below the initial plan, you need to re-plan the calculation. That means you can cut the budget for these postal needs.
Always record income and expenses
Business financial management is also about recording income and expenses, you know. Therefore, you need to make a complete report so that it is easy to understand. This recording must also be done on a daily, weekly, monthly basis, and one accounting period.
You can also use this financial report as a reference in planning your next financial management. You can also take a strategy based on existing financial reports.
Pay bills on time
Managing finances is also related to your business’s regular monthly bills. Call it electricity, water, pulses and quotas, as well as employee salaries. Make all these payments on time to prevent fines.
Delaying bill payments will actually make your expenses even greater. This will more or less reduce the profits obtained from the results of the business.
Use profits to get other benefits
The difference between successful and mediocre business owners also lies in how you take advantage of the profits you get. Successful entrepreneurs will take advantage of the benefits derived from business to get even bigger profits. You can use it as additional capital to create new products or maybe additional businesses.
Not only that, you can develop these profits by investing steps. You can use mutual funds, gold, or stock to make that money grow more in the future.
Prepare petty cash
In carrying out operations, it’s a good idea to also provide petty cash in a small amount. Petty cash is cash that can be used to meet daily routine needs. For example buying gas, gallons of water, and other daily expenses that are not too big.
Even better if you provide it in small denominations of cash. The reason is, the transactions carried out usually occur in small quantities as well.
Evaluation of business cooperation
You certainly have business cooperation with many parties, from service providers in applications, raw material suppliers, goods distributors, to delivery couriers. In a way, they will also be part of your business. Unfortunately, not all of these parties provide maximum benefits.
The advantage is not only seen from the money side. It could be that some of them maintain the quality of your product or make your product reach consumers faster. More or less, these things will influence the decision to purchase, which in turn creates profits.
So, now try to re-evaluate strategic cooperation with all of these parties. Only maintain cooperation with those who help your business grow well.