The Do’s and Don’ts of Business Money Management

Did you know there are 31.7 million small businesses in the US? 

If you run one of these small businesses, you need to learn about money management. If you ignore this concept, your business may run out of money, and you might then have to close up shop. 

Read on, and you’ll learn the basics of business money management. Once you’ve finished this post, you’ll have a better chance of keeping your business in a solid financial state for years to come. 

Let’s begin!

  1. Understand Your Ingoings and Outgoings

If you want to do a good job when managing business money, you first need to note down all ‘ingoings and outgoings’

If you track outgoings, you’ll understand what your liabilities are each month. You can then compare this figure to your ingoings, to determine if you’re going to be solvent. 

Ideally, you shouldn’t keep all this information in your head. Instead, you should write it all down in a spreadsheet. If you do this, it’ll be easier for you to spot mistakes in your calculations.

Plus, if all this information is in a spreadsheet, you can ask someone else to update the document. 

  1. Learn the Basics of Accounting and Budgeting

A lot of business owners get caught out because they don’t understand the basics of accounting and budgeting for businesses. 

If you want to avoid a situation like this, you should read a few books based on the topic of money management for businesses.

You might even want to take an online course that teaches money management for business owners. 

  1. Prepare for Unexpected Events

Even if you’re an expert when it comes to company money management, you might still be caught out by unexpected events. 

For instance, you might suddenly lose one of your biggest clients, or you may receive an unexpected tax bill.

Following this, you should take steps so to protect yourself from such events. One way you might want to do this is by setting up ‘back-up’ funding sources. 

For instance, if you have a sudden cash-flow issue, you might not be able to meet payroll. Well, fortunately, some lenders offer funding for companies in this kind of situation.

Thus, if you arrange a payroll funding plan, you can easily recover from a situation like this. 

Do You Understand Business Money Management?

Now that you’ve read this post, you should understand the basics of business money management. 

Of course, this is a pretty complicated concept, so it’s okay if you’re a little confused at the moment. If you feel this way, you might want to reach out to an accountant that caters to small businesses. 

If you speak to a person like this, you’ll learn more about money management, and how you should approach everything.

You can then implement this advice on your own, or you could simply hire the accountant to do everything for you. 

If you liked this post, visit our blog to see some of the new articles we’ve published!

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