10 Financial Tips All Businesses Should Follow

by Rob West, CFO, MBA

Sept 1, 2021

Good and effective management of finances makes the difference between a business that succeeds and one that fails at the very first hurdle. Here are some proven financial tips that all businesses must follow in order to be successful.

Pay Attention to Your Budget

Develop an annual budget. We say this over and over. But it is a key to success. It acts as a guiding hand that provides structure to help you make smart business decisions ahead of time. Use it to re-examine your income and expenditures to revise your spending habits so money works harder and smarter for you. I can assist, if needed.

Keep Your Business Paper-Free

With the proliferations of cloud-based business tools, you can easily go paperless. No one likes a messy desk and paper scattered everywhere. You can organize everything on digital platforms and have a backup for all your important documents and business data. Online accounting and invoicing tools allow you to streamline your business processes. They also enable you to keep accurate and efficient records, which will help you when you file taxes.

Automate Bill Payments

This is just plain smart business.  Get rid of the old manual way of paying bills. Use online banking to automate all your payments. This step is like having an unpaid bookkeeper who will also help you avoid late penalties while saving you time and energy.

Select the Right Investors

Investors can be a great asset for your business and can be better than loans.  They can help you scale your business or keep it going during rough times. That said, selecting the right investor(s) is critical to the success of your business. Research your potential investors thoroughly to find ones that work best for you.

Maintain a Good Credit Score

Not much needed to say, here.  A good credit score helps establish goodwill for the business.  It will reduce carrying costs, and Bankers will pay more attention to you. If needed, learn how to overcome a poor credit score.  I can help, confidentially.

Protect Your Business against Fraud AND Reputation Damage

Pay close attention to cyber security. Ransomware is real and proliferating.  Make a point to regularly update your anti-virus software and firewall to ensure that your data is protected.  With regard to reputation protection, avoid posting controversial posts that may alienate fifty percent of your customer base. Train employees to smile and be gracious to all customers.  Always respond politely to any negative review.

Make a Habit of Financial Forecasting

Your annual budget is a document that gives structure to business planning and goal setting.  But regular financial forecasting and analysis is a habit that helps you get a clearer picture of where the business is heading in the short term and knowledge to quickly amend and forge a better strategy for growth.      

Manage Debts

Carrying over the debts of the current year to the next financial year is never good for a business. It’s best to make a well thought out strategy for the repayment of debts before you take loans. Pay off any outstanding business payments, quickly and efficiently.  You’ll also sleep better at night.

Boost Business Savings

A business savings plan can act as a great weapon in your arsenal in the event of a downturn. It will help you face seasonal bad times and keep your business afloat. When making a budget, make a plan to consider whether you have enough savings to cover any potential business shortages. Consider taking a second look at my column last month on establishing 4 key accounts.

Seek Help from an Accounting Professional

Although finances are a necessary part of running a business, managing them isn’t always a strong point for some of us. If accounting, bookkeeping and managing finances are not your cup of tea, then get help from an accounting professional.  I am also a resource. Any financial discussion is strictly confidential. 

Portions of this column contain contributions from Nellie Heaton, a financial blogger.

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Remember:  Know Your Numbers