Are you opening a new business and confused about how to manage your finances? Or maybe you feel your business has been running long enough, but your finances are stagnant?
Maybe it’s not your income that doesn’t meet the target, but how to manage your business finances, for you that needs to be improved.
What is the right way to manage business finances? Is there an app that can be used to help with the process? So, don’t worry, This article will answer your confusion. So, read the explanation until the end, yes!
Why do you need to learn how to manage business finances?
Before discussing how to manage business finances, you need to know the importance of this.
In the science of corporate financial management, there are various ways to manage business finances. All for one purpose, which is to create a sound financial system, so that your company can survive, thrive, and compete with other companies.
On the other hand, if you pay less attention to how to manage business finances, the consequences that must be faced are reduced income, unable to compete with other companies, or even going bankrupt. Therefore, it is important for you to learn how to manage finances.
Differences in how to manage business finances and personal finances
The company that you pals run now is different from your own life. No exception in terms of managing finances. In general, there are 3 differences between managing company finances and personal finances. What are they? Here’s the explanation:
The financial goal of a business is certainly not just buying three meals a day or shopping for monthly necessities. That is a personal financial goal. The purpose of business finance is to make a profit, then the profit is used to develop the company so that it achieves more money.
How about taking company profits for personal use? In general, company managers/owners usually get a monthly salary like their employees. Thus, there is a portion that has been measured for managers and the remaining profits are used as company operational costs.
The allocation of personal funds is certainly different from the allocation of company funds. If you manage personal funds, you can divide the budget items for food, household needs, and so on.
If you manage business funds, then you will generally allocate money for company operations such as office electricity costs, office water costs, company facilities, income taxes, and so on.
When managing personal finances, generally people do not always make financial reports every month. On the other hand, managing company finances must pay attention to every transaction, then make monthly and annual reports on a regular basis.
8 Ways to manage business finances
So that your business continues to grow, there are 8 ways to manage business finances that you can implement. You can learn the explanation below.
Set financial targets
The first way to manage finances is to set financial targets. How much profit you need to achieve in a month, in 3 months, or in one year. Make realistic targets.
Make a company budget
The second way to manage business finances is to make a monthly or annual budget. Write down what types of expenses are needed in one month, then make a nominal limit of expenses for each type. Try to transact according to the budget that has been made.
Pay attention to the company’s financial cash flow
The third way to manage business finances is to monitor/pay attention to the financial flows of your business. Record every transaction related to the company and determine who is authorized to transact with company money in order to reduce the potential for corruption.
Separate personal and company funds
The fourth way to manage finances is to separate your own funds and company funds. Mixing the two funds is one way to push your company to the brink of bankruptcy.
Manage accounts payable
The fifth way to manage business finances is to control accounts payable. If you are forced to owe, then pay the debt on time.
In addition, if there is nothing urgent, you can pay off your trade debts first instead of spending money on other things. This way, your business will have healthy accounts payable.
Take advantage of profits for company development
Every advantage means a lot. The next way to manage finances is to use profits for company development. You can get bigger profits because the company’s performance also increases.
Pay attention to agreement contracts with third parties
Companies often cooperate with business partners or other companies. In the cooperation process, the agreement contract was signed by both parties.
The next way to manage finances is to pay attention to agreement contracts with third parties, especially in terms of finances. This is necessary so that you are not deceived and lose money.
Making financial reporting
The last way to manage finances is to make financial reports on a regular basis. As mentioned earlier, you can make monthly and yearly financial reports.
That way, the track record of the company’s transactions can be monitored and evaluated. This evaluation can be used as a basis for measuring financial goals and making the next budget.
4 Applications to manage business finances
If you have difficulty carrying out the ways to manage business finances above, there is no need to worry. You can use the application to help you manage your business finances. Just search and get the application on the Google Play Store or Apple Store. Applications that you can try include:
Financial transaction recording application
In order to be able to see the company’s financial track record, you can use the application to manage the first finances, namely to record financial transactions. All you have to do is enter transaction data into the application, so that every month the calculated statistics will appear automatically.
Banking application or m-banking
The first application to manage finances is a banking application. Generally, banks in Indonesia have provided applications for the m-banking process. You can check balances, transact with business partners, and so on.
Digital wallet app
In the digital era like now, bank applications are not always an option. The first application to manage finances is a digital wallet. You can also check balances and transact with business partners using the wallet.
The last application to manage finances is to invest. There are various investment options that can be run online, for example, such as mutual funds, gold, stocks, and so on. Make sure to download an application that is registered with the Financial Services Authority (OJK) to ensure its safety.
That’s a discussion of how to manage business finances, the difference between personal finance, and applications that you can use to improve the company’s financial system. Happy business!