Page 22 - Home Business - Fall 2018

Manage Your Small Business Finances

Draw Up a Financial Action Plan to Properly Handle Your Accounts

By CompareMyRates

f you want to keep the cash fl owing into your business owners will save you money in the
business, it is important that you are aware long run and help you manage your fi nances.
Iof all the fi nancial aff airs. Not only will this Business credit cards have a higher credit lim-
it compared to other types of cards, and you
help you maintain a safe fi nancial state, but it
MONEY will also help you avoid unanticipated business will get exclusive perks and rewards for your
business. To make the process easier, you can
debt. You can accomplish a sturdy position to
compare business credit cards at CompareMy-
enable investment in business expansion plans.
Rates all at once, without having to manually
1. Manage Business Accounts
do research and reviews.
To manage the accounts, you can acquire the
services of a competent bookkeeper. Purchas- 7. Maintain a Record of Personal Business Keep a record of your business expenses
to assess invested money.
Loans
ing accounting soft ware is a good option for
Keep a record of your business loans to stay
keeping track of your investments and profi ts.
abreast with your fi nancial status. With an ac- 13. Invest in Renting Instead of Purchasing
2. Assess Business Costs curate record, you can pay back the loans before Th is is the best way to avoid maintenance costs.
It is essential that you keep a record of your having to pay a business tax on the profi t. Consider leasing instead of purchasing; it will
business expenses to assess invested money. save you money and you can cut additional ex-
8. Use Your Profits for Yourself
penses you'd have on the equipment you need
3. Design Financial Projections Using all your profi ts on yourself is not what we for a limited time period. Similarly, you can
Designing a clear fi nancial action plan will assist mean here; you can start with 5 to 10 percent rent your offi ce to make expansion or reloca-
you in anticipating your business obstacles so of earnings fi rst. Th is way you can save money tion hassle-free and easier.
you can work out a plan for overcoming them. consistently and evaluate your business's prof-
itability and can pay the unexpected expenses 14. Apply for a Loan Before Any
of your business. Financial Instability
“ Create templates, 9. Be Frugal with Your Profits Applying for a loan before you face any fi nan-
automatic SMS messages Taking advantage of your business money as cial instability in your business is the right way
or emails to follow up on an owner is not a good idea. It is better that to avoid ‘waiting for a loan’ when facing fi nan-
you set yourself a fi xed amount and use gov- cial trouble. Apply for a business credit when
invoices. ” ernment-mandated advantages only. Th is tip your fi nancial state is stable and good. Th is way
will help you become fl exible in terms of saving you can use the credited amount on your busi-
4. Be Active with Invoicing money for the future. ness's expansion or deal with any emergency
Keep track of who you provide services to. Send situations.
10. Keep Your Traveling Costs Minimal
them invoices once you provide services. Set
Make sure that your traveling costs on busi- 15. Calculate Your Capital for a Safe
and adhere to the fi xed payment terms, which
ness trips are minimal. Be economical when Business Startup
should not be more than seven days. Th is will
choosing hotels or traveling packages. Try not Th is is one of the common problems most
help you keep the fi nances clear. Payments
to overspend on heft y accommodations or small businesses face. Th ey lack enough capi-
follow-up is a must. Create templates, auto-
luxurious hotels. Th is will not impress anyone tal amounts to get through the business startup
matic SMS messages or emails to follow up on
and will cost you an unnecessarily large amount phase. To avoid this, it is essential to save 3-4
invoices. Keep a reference of the invoice num- with no profi t.
bers to cross-check them with the payments months' business expenses or the amount you
that are due. 11. Maintain Legal Fees for the Business think you will need during the start-up phase
An average fee for a legal service is around $450. in advance. Plan wisely if there is no business
5. Make a New Bank Account for Business Discuss your expectations and business deals revenue in the startup phase.
Payments clearly with your lawyer before procuring legal
If you want to stay free from a tax headache services. Select the most cost-eff ective business 16. Avoid Spending Prematurely
and inexplicable losses, avoid mixing your billing option, for instance, hourly payments. Be wise with your decisions regarding spending
personal fi nances with your business fi nances. Discuss the possibility of payment deferment money on business cards, marketing materials,
inventory, signage or cars before you make profi t
Not only will this help you gauge profi tability until your project is fi nancially stable.
conveniently, but will also help you track your or revenue. Th is will block the cash fl ow.
12. Manage the Business Expansion Cost
business expenses.
It is important that you devise a business expan- CompareMyRates is a leading comparison tool in Canada for all
kinds of bank accounts, credit cards, phone, and internet plans. You
6. Get a Business Credit Card sion plan in advance. Investing a large amount
can use it to get the best and cheapest rate available from different
Having a credit card specifi cally designed for in a business that is risky can be dangerous. providers. Visit https://www.comparemyrates.ca/.
®
30 Home Business Fall 2018 www.homebusinessmag.com

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