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6 Key Steps for Better Financial Management

Posted: January 7, 2021 at 8:15 am / by / comments (0)

Whether you’re a finance business directly, or a business trying to keep better control of its assets, finance management is always going to be relevant. It refers to a process of planning and managing the company’s different financial activities. It’s essential for business survival, and for business growth which sees you with positive cash flow. However, it’s important to note that financial management isn’t just about financial stability; it’s about being a business that can be relied upon by customers, be organized and run effectively.

Photo by Lukas from Pexels

With this in mind, here are six key steps for improving your business’s financial management.

Step 1: Ensure that Your Business Plan is What is Needs to Be

Your business plan should always include a financial plan, too. This means planning for budget and finances for the long-term for your business and sticking within your budget and your money goals. Business plans aren’t just something to develop at the very beginning of your business; they should always be updated and be ever-evolving concepts which you can update and keep track of in line with your business goals.

This plan will help you to manage your finance goals and expectations better.However, if you want to get the most out of your business plan, you should consider several essential factors. These can include a sales forecast, budget for certain expenditures, cash-flow statement, income projections, list of assets and liabilities, and a breakeven analysis.

But, on top of these things, it may also be a good idea to know your unique money personality. You can find different types of money profiles that demonstrate how individuals make and spend money. As a business owner, knowing your money archetype or personality is essential. When you’re aware of it, you can use your money strengths to improve your business’s financial situation. So, if you want to know your archetype, take the money archetype quiz from a reliable website now, and you’ll get the result you need in time.

Step 2: Make Financial Review a Regular Plan

You’ll always need to take stock of the money you have, your expected outgoings and cash flow. Planning for regular financial review means that you can always be in the loop about cash and stock levels. Setting up a good routine with this is key, such as scheduling in reviews or setting reminders.

Step 3: Know the Minimum that Your Business Needs to Run

At the very heart of it, you should always be aware of the minimum costs that your business requires; this means base outgoings such as rent and bills. If your business can’t afford to meet minimum costs, then this will be a greater problem for your business overall — and its customers.

Step 4: Build Your Financial Leadership Skills

Finance professionals have the greatest pressure to lead successfully, not only for the wellbeing of the business’s finances but when taking care of financial services for customers too. Building up these skills to be more effective will always be a boon, such as gaining an Online Certificate in Ethical Leadership for financial positions.

Step 5: Have a Good Invoicing System

What can cause significant problems for a business is customers who consistently fail to pay on time. Late payments — or even delayed invoicing — can often snowball into bigger financial problems, such as your business being unable to pay its suppliers until a customer has paid.

Being extremely organized when it comes to invoicing is key to keeping on track with finances. Some suggestions include:

  • Have a clear invoicing schedule with reminders of when to invoice clients
  • Make terms and conditions clear from the very start, so that customers are aware in advance what the payment terms are
  • Send a reminder about the payment due date in advance
  • Chase down any overdue invoices straight away
  • Use invoice software to streamline the invoice-making process

Step 6: Keep on Top of Taxes

You don’t want to incur any unnecessary fines or interest charges, so always keep track of the tax payments you owe as a business. If you’re unfamiliar with your state’s tax laws, get the assistance of a tax specialist to handle your company’s taxes. They can assess your tax situation and prepare the tax returns for you. They can also help you find ways to save some money on your tax liabilities.

Dealing with the financial aspect of your business doesn’t have to be difficult. By using these key steps, you can provide a better financial service for your business and its customers.

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