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9 Hacks to Manage Financial in Business

how to manage financial in business

In building a business, one of the most important things is how to manage business financial. Because, proper business financial management will make it easier for you to achieve business success.

Manage Business Financial

In this discussion, we will discuss strategies/how to manage business financial for beginners, here are some ways:

1. Separating Personal Finance and Business Finance

The first strategy for managing business finances is to separate personal money and business money. The mistake that many novice businessmen make is using business money to meet personal needs. This makes the business capital decrease, even profit / profit can not be seen. In addition, mixing personal money with business money can make it difficult for a business to grow.

2. Separating Cashier and Accounting

The second way to manage business finances is to separate the cashier and accounting sections, this is to minimize the occurrence of fraud. The cashier functions as the party who receives the money from the sale, while accounting functions to prepare financial statements. These 2 tasks should not be assigned to the same person, because the potential for fraud is very large.

3. Making Plans

As a novice businessman, you have to make long-term and short-term plans. The plan includes what programs you want to do, implementation time, equipment, to budget details.

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4. Making Income Planning

The next way to manage business finances is to make an income plan. This is done to predict how much funding is needed to carry out each program that has been previously planned. This revenue plan includes a plan for the products you will sell, sales targets, and the strategies you will use to achieve these targets.

5. Making Financial Targets

Making this financial target serves to find out whether all targets have been achieved or not. In this way, you can see whether your business has the potential to grow or not. If the results have not reached the target, then you can immediately create a new strategy in order to achieve the specified target. To make a financial target, you can start by determining how much income, and the target buyers you want to get for 1 year.

6. Making Financial Reporting

Financial reports seem familiar when talking about business financial management. Financial reports are mandatory for a business person, because with this report you can find out the cash inflows and outflows. And this financial report can help you determine the right strategy to grow your business.

7. Monitoring Business Financial Cash Flow

This strategy is important to do to know in detail the entry and exit of business money. Professional business people usually choose to use the services of an administrator to monitor the cash flow of the business. However, if you are still a novice businessman, you can take advantage of some accounting software to monitor business cash flow.

8. Emergency Fund

An emergency fund is important to be prepared by every businessman, both beginners and professionals. These funds are used to meet unexpected needs, such as large losses. With this emergency fund, you can still keep your business stable and not collapse.

9. Profit Used To Develop Business

You can use the profits from a business to meet personal needs. But there’s nothing wrong with using profits to develop your business. For example by adding products, improving packaging, promotions, etc.

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Those are some ways to manage business finances that you can apply.

Mistake in Managing Business Financial

But in practice, many mistakes are made by business people in managing business finances. Here are some mistakes in managing business finances that you should avoid:

1. Easy to Borrow Money

Lack of funds when running a business is normal. Some people overcome this by borrowing funds. However, don’t make it a habit, especially when sales are down. Because by borrowing money, you also have to pay interest in accordance with applicable regulations.

2. Not Recording Business Transactions

Making transaction records is a basic thing that must be done by business people. This is to avoid mistakes when making financial statements. In addition, by recording every transaction, you can monitor expenses and income.

3. Not Separating Personal and Business Assets

This mistake is made by many beginner to intermediate businessmen. Usually, when sales drop and expenses swell, they take personal savings to cover it. As a result, personal assets become mixed with business assets. Instead of taking personal savings, you should set aside the profits you get for emergency expenses. And conversely, avoid making personal purchases using business finance.

Related: 8 Hacks To Stay Consistent In Business When You’re Bored With It

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4. Unclear Financial Priorities

Unclear financial priorities are an indicator of poor financial management of a business. Expenditures that are not in accordance with priorities, can result in other needs not being met. This can also cause your income to run out quickly, because it is used to meet needs rather than priorities.

5. Lack of Commitment

In managing business finances, you must instill a strong commitment. Lack of commitment in financial matters can result in poor financial management. For example, taking business finances to fulfill a lifestyle. Things that shouldn’t be done can make your business income and expenses out of balance.

These are some mistakes that are often happen by business people to manage business financial. In order for your business finances to be stable, you can apply the methods of managing business finances. To start a business, you must have a strong determination and commitment, and never give up if you experience a decline in sales. Business people must have many strategies to keep their business stable and even growing.

Written By

Jonathan Snyder is the author for 5 best selling books on Amazon (Development as Service) and part time contributor at Life Hack Solution. Reach out at info@lifehack-solution.com.

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