In some respects, business finances are similar – though unsurprisingly the scale and complexity of the operations usually dwarfs anything you may have experienced domestically. That said, if you know how to budget, manage your money and be proactive in anticipating and sorting out problems, then the chances are that your business’s finance will reflect your good habits.
Financial Management Systems
Every enterprise needs money management systems in place, not only during startup but also during periods of regular operation and sustained growth. You need to consider a range of systems and ways of handling things that will help you avoid making financial mistakes that could have long-term implications for the viability of your business.
- Make sure that whoever is doing your accounts really knows what they are doing. You might want to keep costs low and do it yourself, or employ a member of staff with some formal training in accountancy. The ideal solution is a competent financial manager who can use the accounting technologies available to modern finance to manage the money. This usually means financial software that uses advance data storage and profiling to keep track of everything, including taxes owed, payroll, invoicing and accounts receivable.
- Budget carefully. You should have an annual budget that gives you a guideline for the whole year, and then a monthly version to look at the reality of the day-to-day business. If winter months decrease the footfall, for example, factor this in, and factor in an upturn for when the weather improves.
- If you’re in a position to invest, then talk to people who are highly experienced in the investment field. The web has revolutionized how businesses and individuals get information about how to manage their money, and with the rapid rise of mobile technology with tablets and smartphones this information can be accessed from anywhere at any time.
- Good investment advisors can easily be found online. For example, you could look up a company such as Fisher Investments that specializes in asset management. Crunchbase data on Fisher Investments is a good place to start learning what they can offer to individual and institutional investors. Crunchbase is a website that contains vast amounts of data about businesses small and large, and can provide that first engagement with financial experts. Investing naturally has risks, so it’s a good reason for you to look for advice that experienced professionals can offer.
Putting good financial systems in place from the start will give you a critical overview of what’s happening to money coming in and out. It’s the smartest move any business can make and sets you up for long, profitable years of trading. Good financial advice will also help you manage the many aspects of dealing with complex issues such as your payroll, deductions and tax, as well as keeping you focused on the bigger picture.
Managing money is something that you will – or certainly should – have done from a relatively early age. From school through college through raising a family, you’ll have had to deal with all sorts of financial situations, good and bad.