How to Manage Business or Company Finances

Tips on How to Manage Business or Corporate Finance

      How do you manage your company's business finances so that they can continue to grow?

A healthy business requires good financial management.

The amount of income and expenses must be balanced, not only managing finances, business people also need to understand the importance of managing cash flow and how to keep that cash flow smooth.

However, there are still business people who underestimate the financial management of their business.

If you want to have a business that runs smoothly and is more profitable, then at least make sure your company's financial management is also good.

Here are some tips and tricks to manage finances in business.

Determining Percentages in Financial Management

To manage finances properly, the first thing that needs to be done is to determine what percentage of funds are allocated for business operations.

What percentage of the profit target you want to achieve, money for business cash reserves, and money for business development.

By determining the percentage, you can more easily manage your finances according to the portion that has been determined at the start of the business.

Paying Bills on Time is also a Way to Manage Company Finances

It is important for you to pay all your business bills on time.

Set up monthly reminders to make sure no business bills are overdue.

Avoiding late payment of fees can maintain a good financial position of the business.

Making Financial Books is Important in Managing Business Finance

It's not enough to run a business based on human memory. Complete records are required. For example, such as making financial reports, whether it's an income statement or balance sheet.

Try to record all transactions into a simple bookkeeping.

Thus, you can control all your business financial transactions. In addition, keeping books will also make it easier for you to evaluate business developments.

Reducing Debt Risk

As much as possible reduce debt risk in running your business.

Growing a business by way of debt is indeed allowed. However, be careful with debt. The additional burden of debt installments in unfavorable financial conditions will only worsen business conditions. (businessnewsdaily.com)

Create an Income Plan

Starting a business requires a good plan. However, if the planning is not carried out fully, then the results obtained will not be optimal.

It might actually cause a loss. Therefore, to manage finances, a plan is needed to manage income.

Think about which products can deliver for your company. Determine how much to produce, look at market segments and determine your sales target.

Don't forget to develop a more mature marketing strategy so that you can reach the target as planned.

Create Annual Evaluation

Making financial evaluations is the ultimate goal of recording cash flows in a period.

There are 2 reasons why a financial evaluation should be conducted.

1. Financial evaluation shows a company's achievements during a period.

This evaluation can provide information on whether the steps taken are correct. Financial conditions for a period will also be clearly visible.

2. Financial evaluation can show the company's spending pattern in a period.

If there are many deficiencies, you can take corrective steps in the next period.

Determine the Time Period

To manage company finances better you need to separate by time period.

Starting from making a general plan for the business with a program that will be carried out over a period. Then, make a detailed requirement of each program.

If you have made program details, divide them into several categories of implementation time.

Starting from daily, weekly and monthly expenditures for the short term. Expenses with 1 to 3 years in the future for the long term.

Separate Personal and Company Assets

One thing that often makes business people fail in their business is to consider the money earned from the business as their personal money.

This perception is not completely wrong if the business is owned by an individual. However, this habit can lead the business to fail.

For example, the costs that should have been for production are used to finance personal needs. This causes the business to be undercapitalized.

What you can do is do the books so that it can help you see the company's financial cash flow, and of course with these books you can separate your personal and business needs.

You can separate your personal and business finances using a bank by creating a business account and a personal account.

By doing so, all transactions from your business will have clearer documentation.

Manage Cash Flow

A business of course requires funds to keep running.

These funds are used to finance the business for purposes such as paying for employee salaries, production needs, etc.

No matter how much income your business receives, if most of that income is in the form of receivables, then over time the business operations will experience problems.

This is the importance of managing cash flow in a business.

When managing finances, make sure all records are matched with purchase receipts or other evidence of expenses.

After recording the expenses, you also have to record the income. The details of these funds will later be used to make a financial balance sheet.

From the balance sheet, you can find out the financial position of the company.

Even though the cash flow is already smooth, you still have to do regular and periodic monitoring.

Try to pay all existing bills so that they don't become a problem in company finances.

Prioritize the Company's Needs

Remember this theory, income should be greater than expenses.

Business people must also be careful in choosing what the company needs and what it does not.

This is to reduce the company's expenses, too much spending compared to income will make the cash flow unbalanced.

Therefore, try to prioritize the needs that the company really needs.

Set aside Company Revenue for Business Development

It doesn't mean you can't enjoy the profits that come from your business, it would be wise if you can manage these profit funds into your business development funds.

One of the objectives of financial management is to keep the business growing and developing.

The more developed your business is, the greater the income you will receive. Therefore, set aside a portion of business income to develop your business.