Money management is a vital activity for any small business. If you follow the tips in this article, your company will be able to more easily manage money.
Keep Personal and Business Finances Separate
If you want to manage money well, it is vital not to mix personal and business finances. Using personal funds to cover a business expense is often just a quick fix that leads to bigger problems down the road, so try to avoid this temptation. To that end, it is extremely helpful to set up separate budgets and accounts for your personal life and business activities.
Being frugal is another effective way to manage money. This may sound like obvious advice, but many companies miss opportunities like saving money by buying used instead of new equipment. Also be sure to take advantage of rebates, cancel any subscriptions your company doesn’t use and keep utility costs in check.
Learn about Accounting
Knowing the basics of accounting can go a long way toward smoothing out your business’s finances. As Daniel Kehrer points out for SCORE.org, it’s very difficult to manage money without a grasp of the different financial angles of your business. Check out Kehrer’s article for a look at some basic areas to be aware of. An online accounting class can be another great place to start.
Pay Bills Promptly
For the long-term financial health of your business, it’s essential to pay your bills promptly. Late payments can ding you with penalty fees in the short term and destroy your business’s credit score over the long term, making it much harder to obtain financing.
Don’t Neglect Negotiations
Negotiating with vendors and suppliers can be extremely worthwhile. There’s no harm in asking for perks like early payment discounts or a longer grace period.
If you’d like more tips on thriving in the business world, take a look at Mossberg Strategic Capital’s other blog posts.