Keeping track of finances is an area that many business owners struggle with, but it is one of the most important areas because cash flow is the lifeblood of the business. Small errors, as well as a lack of knowledge and resources, can be costly and inconvenient.
We’ve chosen some of the most important factors to consider and provided these suggestions and resources.
Read 5 Common Security Problems That Companies Could Face In 2022.
- Find the best credit union in your area. Finding a credit union that understands the needs of your business can go a long way, given their frequent willingness to provide loans. There are numerous online tools available to help you find credit unions based on specific criteria. Many local credit unions require membership in an affiliated organization, which is frequently listed on their website; however, the costs to join are usually minimal and well worth it. Here are a few resources to get you started: Credit Union Locator, Credit Unions Online, Credit Union National Association
- Find a dependable mentor. With sites that connect entrepreneurs with mentors who fit their needs, free help is just a click away. Having a mentor assist with financial planning can be extremely beneficial if the person is trustworthy. The Association of Small Business Development Centers is one resource that provides access to full-time business counselors across the country, many of whom are former entrepreneurs or M.B.A. graduates. SCORE (affiliated with the Small Business Administration), iMantri, and MicroMentor are other sites for finding mentors.
- Select the best accounting software. While software is an important part of small business finance, sorting through dozens of options can be difficult because there may be better options for your specific needs than the popular QuickBooks program and related packages. Find Accounting Software is a free tool that uses a detailed questionnaire to help you find the best solution. TaxSites has a wealth of resources, including a list of software for small businesses.
- Think about hiring a bookkeeper. A good, dependable bookkeeper can handle all of the tedious tasks that come with keeping finances in order. Understand the different types of bookkeepers and how to avoid fraud. A free bookkeeper hiring test (to be taken by prospective hires) can be requested, and mobile payment systems can help to accelerate cash flow. Payments for goods and services can be accepted more quickly and easily using mobile payment systems. Intuit’s GoPayment system accepts payments through mobile phones and can directly download the data into QuickBooks. Users can search, view, and create reports in Intuit’s online Merchant Service Center to monitor transactions.
- Consider factoring receivables. Accounts receivable financing allows for immediate payment of invoices rather than waiting 30 days or more, tying up working capital. Factoring services advance the invoice amount minus a “discount,” or fee (advances of 80 to 90 percent are common), and provide a “rebate” when invoices are paid – the amount varies depending on how long the customer takes to pay. FactorFind is a directory of factors that specialize in small businesses. At the International Factoring Association, BuyerZone, and Resource Nation, businesses can be matched with the most appropriate factors.
- Recognize and quantify capital versus operational costs. The goal is frequently to reduce the totals on the capital costs side of the spreadsheet and shift more to the operational side. Operating costs do not necessitate complex depreciation calculations and can be adjusted more easily from year to year. Outsourcing is one method because it reduces operating costs and helps to free up cash by not tying it up in capital investments (such as IT infrastructure, servers, and so on) or tasks like head hunting and payroll management.
- Examine the service budget year over year to determine the impact on the bottom line. Are the costs of providing a service increasing, remaining constant, or decreasing? Determine the cost of providing specific services to the business, such as recruitment, payroll, or benefits management. Understanding cost-to-serve provides the business with valuable insight into projects and tasks, how long it takes to complete them, and, as a result, how much they cost. If you want to cut costs, there are hard numbers to work with that show exactly what the impact on quantity and quality of service will be if resources are cut.
Read more from business for deep SEO techniques.