Five Tips to Help You Manage the Finances of Your Small Business

By Westbound Bank | Posted on December 6, 2017 | 0 Comments

Five Tips to Help You Manage the Finances of Your Small Business

Managing a small business is no easy feat. You may have had a great idea that has turned into a successful business, but how can you keep it that way? And if it’s not successful, how can you help make it so? Managing the finances of your business is the key. The economy is constantly changing and is volatile in nature. Making sure you are planning ahead, and managing your finances well, can ensure long term business success.

Know the 411.

Learn how to read financial statements. The ones you will most likely deal with are cash flow statements, income statements and balance sheets. Cash flow statements show you how much money is coming in vs. out, balance sheets reflect the company’s assets and liabilities, while income statements show how much revenue your business is bringing in. Knowing how to read these documents properly will help you know how much you have to spend and when to spend it.

It Shouldn’t Be All in the Family.

Keep your personal finances separate from your business finances. That means having a credit card strictly for your business and putting all business expenses on that credit line alone. This will help you keep track of your business operations and spending. You should also consider opening a business savings account; profits can be transferred to this account and later used it to pay off taxes that accrue.

Cut Costs.

This may seem like a no brainer, but it is incredibly important to cut costs where you can. Try using free software for your operations. Have business meetings over video conference calls or over the phone instead of booking travel trips. Don’t buy high ticket items for supplies or equipment. It’s important to note that cutting costs is not about sacrificing quality. You should always present your clients with the highest quality possible; however cutting business costs will increase your profit margins in the long term.

Measure Your Performance.

By monitoring your company’s financial performance in comparison to past financial statements, you are protecting your future revenue and cash flow. Being aware of the highs and lows will help you plan ahead and improve your business performance along the way.

Seek Guidance When You Can.

If there is something you’re not sure about, talk to your financial advisor. They can help you forecast financial hurdles, help you tax plan for the current year or the following, or just be there for any questions you might have.

At Westbound Bank, we are here to help you navigate the financial hurdles of running a small business. So call us today at 713.554.7615; we’re happy to give you the help you need and we always want to be affiliated with you.


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