Three Methods To Help You Keep track of Business Finances

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StrategyDriven Managing Your Finances Article |Keep track of business finances|Three Methods To Help You Keep track of Business FinancesIn business, it’s easy to make mistakes with money. Even if you try your best to avoid risk and make up for mistakes you’ve made in the past, you can still get caught in money traps from time to time. And that’s why it’s important to make a real business budget that can be changed.

Many businesses don’t make this choice, but it can make a huge difference in how they handle their money. But this post is here to help you with that! The more you know now about how your cash flow can change and how to deal with that, the better your business will do in the future.

Look At Fixed Costs And Changing Ones

Every business has fixed costs and variable costs. That’s just how the world works. The important thing is to separate the two groups. What will cost you the same amount every time? And what costs will only happen once in a while? Sit down and think about these differences right now, and write down any costs you can think of.

Most of the time, these costs can overlap in some places. For example, the cost of hiring a new employee is a variable cost, but the cost of running payroll is a fixed cost. You still need to make sure you know which is which, because you need to set aside money each month for them. You need to make sure you make considerations for investments too, such as investing in Affordacool Swamp Coolers.


Write Down Your Goals

What do you want to be able to do with your business? Because if you know what you want your company or product line to do, you can make your budget more flexible. You can use your money and resources much more effectively and check off goals as you go.

So write down everything you want your business to do, because you’ll need money to make it happen. Include both short-term and long-term goals here, like things you might be able to do in a month and things you want to work up to over a few years. Write down these goals as clearly as you can, because they need to be specific for the budget to be as clear as possible.

Look At Your Finances Once A Month

So, once the first plan is done, put it to the test. Use it for a month to see how it affects your cash flow, then come back after a month. What did work? What didn’t work so well? What seemed like a good idea at the time, but is now obvious to need more work? Here is your chance to answer these and other questions.

What does it mean for next month if your bills were higher than you expected or you didn’t get as much business as you thought you would? Every 30 days or so, take the time to tweak your budget, and it will be much easier to reach the financial goals you set.

Making a budget for a small business is going to be hard, but it doesn’t have to be as hard as you think. In fact, many small business owners don’t do it because they think it’s too hard, which can only cause them more problems. So, before you really start your business, make sure you have this financial plan written down.

How To Enhance Your Business’s Finance Department

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StrategyDriven Managing Your Finances Article | How To Enhance Your Business's Finance Department

Finance is the backbone of any business. Without good financial planning and management, a company can quickly find itself in trouble. As such, ensuring that your business’s finance department is up to par is important. Here are the top ways to enhance your company’s finance department:

Implement Financial Software

Financial software help streamline many of the tasks performed by your finance department. This frees your employees so they can focus on more strategic tasks.

The right software solution can automate tasks such as bookkeeping, invoicing, and tracking payments. This will help improve your finance department’s efficiency and allow your employees to work more effectively.

You can use different software and templates for your business. For example, for bookkeeping, you can use FreshBooks, and for invoicing, you can use Zoho Invoice.

Hire Qualified Accountants

Good and experienced accountants are worth their weight in gold. They can help keep your financial records in order and offer advice on improving your company’s financial health.

When hiring an accountant, be sure to look for someone who is qualified and has experience in the finance department. You should also ensure they are a good fit for your company culture.

You can engage with finance & accounting recruiters to help you find the right candidate for your business. They will be able able to identify qualified candidates that match your specific needs.

Develop Strong Internal Controls

Strong internal controls are essential for preventing and detecting errors or fraud in your company’s financial transactions. They also help to ensure that your financial statements are accurate.

There are many different types of internal controls, but some common ones include segregation of duties, employee background checks, and physical security measures. Others include authorization requirements and independent audits.

For effective internal controls, you should customize them to fit the specific needs of your business. You should also do regular reviews to ensure they are still relevant and effective.


Develop Policies And Procedures

Policies and procedures are important for ensuring that your finance department runs smoothly. They can help to standardize processes and improve communication between employees. Some common finance policies and procedures include expense reimbursement, Accounts Receivable (A/R) management, and Accounts Payable (A/P) management.

Developing policies and procedures specific to your company’s needs is important. You can develop policies and procedures by yourself or with the help of a professional. If you choose to do it yourself, many templates and resources are available online.

Good Remuneration And Benefits

It’s important to offer good remuneration and benefits to your finance employees. This will help to attract and retain good talent. Some common benefits you can offer include health insurance, retirement plans, and paid time off.

Remuneration is not just about money but also about recognition and appreciation. Show your employees that you value their work and contribution to the company. This can be easily done through things like bonuses, promotions, and awards.

Foster Growth And Development

Ensure to provide opportunities for your finance employees to grow and develop in their careers. This can be done through training, mentorship, and educational opportunities. Conferences and seminars are also great ways to encourage professional development.

Encourage a culture of learning in your company and provide opportunities for employees to share their knowledge with others. This will help to create a strong team of finance professionals that are always learning and growing.

Encourage Teamwork

Teamwork is a key ingredient for the success of any finance department. It’s expedient to foster an environment where employees can work together effectively. This can be done through team-building exercises, regular meetings, and communication tools.

Technology can also help to facilitate teamwork. Many different software programs can help employees to collaborate and communicate with each other.

Provide A Healthy Work-Life Balance

It’s important to provide a healthy work-life balance for your finance employees. This means offering flexible work hours, telecommuting options, and childcare assistance. Other benefits that can help to promote a healthy work-life balance include fitness programs and wellness initiatives.

A healthy work-life balance, therefore, becomes essential for employee productivity and satisfaction. It can also help to reduce turnover in your department.

Finance is a critical part of any business. Following these tips can enhance your company’s finance department and ensure it runs smoothly. These tips will help you to streamline many of the tasks performed by your finance department, freeing up your department so they can focus on more strategic tasks.

The Pros And Cons Of Taking Out A Business Loan

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StrategyDriven Online Marketing and Website Development Article |Business Loan|The Pros And Cons Of Taking Out A Business LoanBusinesses are the driving force behind economic growth. They create jobs, increase productivity and innovation, and drive demand for goods and services. Aside from that, they’re the perfect instruments for community development. In fact, it’s been estimated that every dollar invested in small businesses gives back 67 cents to the local economy.

With the global economy in its current state, it’s easy to see why many business owners are looking at business loans to get their companies off the ground. But what are the pros and cons of taking out a business loan? This article will explore some of these advantages and disadvantages.

What Are Business Loans?

Business loans are funding that allows businesses to pay for large-scale purchases or investments. They’re usually short-term loans designed to help businesses grow and expand. Business loan rates are a core part of the business loan process. They vary depending on the type of loan and lender you choose. They also vary across countries, but you can compare them from one lender to another. See current business loan rates in Australia to learn how the comparison works.

Pros Of Taking Out Business Loans

Business loans are an excellent way to get the financing your business needs. Here are some of the top pros:

1. Keep Cash Flow Healthy

If you’re a business owner, you know one of the most important things is keeping cash flow healthy. If you don’t have enough money coming in, you won’t be able to pay your employees or make payroll. It’s also crucial that you keep the line of credit open so that if an emergency comes up, you have access to additional funds. If you have a business loan with a low-interest rate and no prepayment penalty, it’ll be easy to use this money without worrying about regret.

2. Easy To Get Approved

If you want a business loan but don’t have good credit or any collateral to secure the loan, it can be challenging to find an institution willing to lend you one. A small business loan with no credit check can help solve this problem. It allows anyone turned down by other lenders, usually because of poor credit history or lack of collateral options, to access credit. The lender will not check your credit history or take any other type of security from you to ensure you repay the loan.

3. Quick Turnaround

You can apply for a business loan in minutes, and the approval process is usually swift. In fact, many businesses will receive their funding within 24 hours of applying. Thus, it doesn’t take long to get approved and get the funds in your account. This means that if there’s something urgent that needs to be done, such as paying for supplies or equipment for a new project or an upcoming event, you won’t have to wait around for weeks or months. This time benefit can help your business scale.


Cons Of Taking Out Business Loans

There are some disadvantages to taking out a business loan, which you should consider before making a decision. Some of these include:

1. Interest Rates

When taking out a loan, you’ll deal with fees (called interest) related to issuing and receiving the funds. These fees can range from a few hundred to thousands of dollars. The interest depends on the company offering them and how much money they lend. For example, banks may provide loans at lower interest rates because they offer more security than other companies. If your business isn’t very profitable yet, it may be worth looking into loans from smaller lenders who can give you better deals on interest rates.

2. You’ll Pay Back

No banks or financial institutions will give you a loan and leave you alone. In other words, you’ll need to pay back. You may get a loan with a very low-interest rate, but it could be difficult to pay back if your business isn’t doing well. You should also consider how much money you’ll have left over after paying back the loan. If you can’t afford to make payments each month, it might not be worth taking out a loan in the first place.

3. Credit Requirements

Another disadvantage is that you may not get approved for a business loan if you have bad credit. Bad credit refers to credit scores of 580 or lower on a 300–850 scale. It usually means you’ve had a few missed payments in your history. Lenders will check your business credit history and look at how much debt you have. They also will look at your payment history. If you don’t have good credit or if you’ve been delinquent on payments, lenders may deny your application for a business loan.

Conclusion

Business loans are an invaluable tool for any business owner who wants to grow their company. They allow you to get the funding you need for your business to succeed without the hassle of trying to find investors or partners. So if you’re considering applying for a business loan, take some time to research the pros and cons. Once you know these, choose a lender that captures your business interest.

The Costs Of Running A Trade Business

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StrategyDriven Managing Your Finances Article | The Costs Of Running A Trade Business

Thinking of starting a business as a tradesperson? Trade businesses include the likes of plumbing, electrics, roofing, tiling, landscaping and window cleaning. They can be a popular business venture for those that have the skills – and they can be relatively inexpensive to start up compared to many other types of business. However, there are still costs that need to be budgeted for if you’re going to start a trade business. Below are some of the costs to consider when running a trade business.

Tools

Perhaps the most important cost to consider is acquiring tools. Pretty much every trade from pest control to tree surgery requires tools. Certain trades are likely to require more expensive tools than others – for example, a decent piano tuning kit can be bought for less than $20, while a decent commercial carpet cleaning machine will cost over $1000 to buy.

Buying used tools could be a way to save money. When it comes to specialist tools that you may only need for one-off jobs, it may make more financial sense to hire them. You can also lease tools, which can be cheaper upfront than buying, but potentially more expensive in the long run.

To work out exactly how much you need to spend on tools, make a list of all the tools you need. Then compare prices online to work out exactly how much all of these tools will cost. If you need to take out a loan, this will help you to know exactly how much to borrow.

Supplies/parts

On top of your tools, there will be ongoing supplies or parts that you’ll need to buy. These will likely vary from job to job and are something you should factor in when it comes to quoting a price.

The internet is one of the best places to look for niche supplies like boiler auxiliary equipment or pressure washing chemicals. More general supplies and parts may be possible to buy from a local store, although you may still find that you access greater discounts online. Some suppliers may even be able to offer loyalty discounts or bulk discounts for supplies and could be worth sticking with.

Travel

You also need to consider the cost of travelling to your clients. This will typically involve owning or leasing a vehicle. Some tradespeople simply use their personal vehicle. However, if your personal vehicle is too small for your tools or not business appropriate, you may have to consider acquiring a new vehicle (a separate vehicle could also give you the option to invest in branded vinyl wrapping).

Each job you do will cost you money in fuel, which is also important to budget for. Many trade companies will only serve customers in a certain area so as not to spend too much time or money travelling to clients. Of course, if your trade is very niche, you may have no option but to cover a larger area in order to source enough customers.

Licensing/certification

Some trades do not require you to have any licensing or certification. In other cases, licensing or certification may be compulsory. It’s worth looking into the regulations of your state to see what the case is.

Most companies need a business license, which can cost between $50 and $550 depending on the state and profession. Certification fees are likely to vary depending on where you obtain them from – in some cases, there may be multiple certification courses that you can take. Some may also have to be regularly renewed, which is something to budget into your running costs.


Insurance

In many cases, it is not mandatory to take out insurance as a tradesperson. An exception is if you hire employees, in which case you are obliged to take out worker’s compensation. You will also need auto insurance for your commercial vehicle.

Other types of insurance may be highly recommended depending on the trade. Public liability insurance is something that most trade businesses should consider taking out. This insurance scheme can help to pay out compensation if a member of the public is injured or their property is damaged as a result of your work. You could also consider insuring your tools against damage and loss.

It is worth taking the time to shop around for insurance as it could save you a lot of money. Some insurers may offer specialist policies catered to the risks of your specific trade. There are also trade business insurance packages that you can take out that combine multiple policies for a discounted price.

Marketing

Marketing is essential for attracting business. You will need to invest some money regularly into marketing if you want to generate customers and grow.

A website is the most basic marketing necessity. You can build a website yourself, or hire someone to build it for you. A DIY website is the cheapest option – nowadays there are drag-and-drop website builders you can use that don’t require any programming knowledge.

There are so many other types of marketing that you can spend money on including social media marketing, SEO, PPC ads, business cards and flyers. It’s worth experimenting with different forms of marketing to see what works. You can hire marketing agencies to help handle marketing for you – in such cases, make sure to shop around to get the best rates.

Tax

Every business has to pay tax on its earnings. You will need to file a tax return each year, which will need to be accurately calculated. You can do this yourself or you can hire an accountant (the latter can save you a lot of time and hassle, but is an extra expense to budget for). At the very least, you should try to invest in accounting software to help make bookkeeping easier.

A benefit of being self-employed is that you get to claim expenses, which can result in tax reductions. This includes all the costs listed above. This is why it’s important to record every expense, so that you can accurately deduct the necessary amount of tax each year.

Personal Sacrifice: Financial Decisions for Entrepreneurs

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Entrepreneurs are often lauded for their innovative ideas and risk-taking spirit, but the importance of financial management for entrepreneurs is often overlooked. Financial stability is essential for those without a safety net, which can be the difference between success and failure.

Several statistics underscore the importance of financial management for entrepreneurs. For example, according to a study by The National Small Business Association, 60% of small businesses fail due to economic reasons. Furthermore, a survey by Forbes found that 78% of failed startups cite financial instability as the main reason for their failure.

Financial stability is crucial for entrepreneurs. There are several things that entrepreneurs can do to improve their financial footing, such as creating a budget, tracking expenses, and maintaining a healthy cash flow. By taking these steps, entrepreneurs can improve their chances of success and avoid costly mistakes.

However, there is no denying that entrepreneurs must make a few sacrifices to achieve financial stability. There will be times when you have to put your business interests ahead of your personal ones. Here are a few financial sacrifices that entrepreneurs have to make.

Social Activities

Social life is one of the first things entrepreneurs have to give up. With all the time and effort required to get a business off the ground, there is simply no time for socializing. Moreover, you might be spending a lot of money on those social activities, making it more challenging to improve financial management.

It doesn’t mean you must become a hermit; you can still find time for your friends and family. However, you will have to cut back on activities that take up a lot of time, such as going out to bars or clubs, attending parties, or taking vacations.

In addition, you may have to spend less time with your loved ones while working on your business. This sacrifice is not easy, but it’s important to remember that your business is your priority. Your family and friends will understand if you cannot spend as much time with them.

Luxury Items

Another thing that entrepreneurs have to give up is luxury items. When starting, it’s important to focus on the essentials and forego unnecessary purchases. You might give up your expensive car, designer clothes, and other luxury items.

It cannot be easy to let go of these things, but it’s important to remember that your business comes first. Luxury items are a waste of money when trying to improve financial management.

Moreover, luxury items can make it difficult for you to relate to your target market. If you’re trying to sell a product or service to middle-class consumers, they’re unlikely to relate to you if you’re driving a Bentley. Luxury items can also make connecting with potential partners and investors difficult.

While you don’t have to give up all your luxury items, it’s important to be mindful of your purchases. Ask yourself if an item is essential or if you can live without it.

Mortgage or Rent

Another financial sacrifice entrepreneurs make is giving up their mortgage or rent. This can be difficult, but freeing up money for your business is often necessary. Homeownership means going into debt, which can be a challenging situation for entrepreneurs.

Giving up your home can be a considerable risk, but it’s one that you may have to take if you want your business to succeed. If you’re not ready to give up your home, consider renting it out and living elsewhere.

Fortunately, you can also partner with a company that assists in home mortgage for entrepreneurs. This service can help you save money to invest in your business. If you cannot afford monthly home ownership and rent payments, you can stay with family or friends until your company is more established.


Retirement Savings

One of the entrepreneurs’ most prominent financial sacrifices is giving up their retirement savings. This is a difficult decision, but getting your business off the ground is often necessary.

Retirement savings are significant but are not as important as your business. Do it if you need to use your retirement savings to finance your business.

Of course, this doesn’t mean you should empty your retirement account. You should only use what you need and make sure you have a solid plan to replenish your savings once your business succeeds.

The Bottom Line

Financial stability is essential for entrepreneurs. There are several things that entrepreneurs can do to improve their financial footing, such as creating a budget, tracking expenses, and maintaining a healthy cash flow. However, there is no denying that entrepreneurs must make a few sacrifices to achieve financial stability. There will be times when you have to put your business interests ahead of your personal ones. By taking these steps, entrepreneurs can improve their chances of success and avoid costly mistakes.