Small Business Finance

Tips for Managing Small Business Finance

Success in a business or venture will depend on how you manage it. If it is managed properly, the business can run very smoothly, the opposite applies if it is poorly managed. Before you go directly to it, it would be better if you strengthen your understanding in business theory, especially by managing the finances of the business.

Tips Mengelola Keuangan Usaha

The following is how to manage small trading business finances that you must really understand in getting started:

Educate Yourself

Self-education is the very first thing you should do when it comes to managing a business. How to do self-education can be by reading financial statements. For those of you who don’t know, basically the financial statements have four parts, namely:

  • Earnings report
  • Capital report
  • Cash flow statement
  • balance report
  • By reading and studying the financial statements at least you can conclude for the steps that will be taken for the development of your business.

Doing Planning

This planning in general and in general must be done before you start a business. You have to prepare the biggest picture and also the initial steps you will take in pioneering MSMEs. After later the big plan is made, then you can divide it into several parts.

For example, in daily, weekly and monthly plans by using this way of managing business finances, the development of the business becomes much more structured. You also have to make a detailed plan. Starting from what things will have to be done later, the needs needed and also the capital that will have to be prepared.

Creating a Notebook for Finance

In order to be able to manage your own business finances, it must always be recorded, the goal is to monitor all transactions that will go out and enter. This recording will reduce the risk of improper spending. No matter how small the scale in a business that will be run, at least provide a cash book.

This cash book will later be used to record incoming and outgoing money accompanied by evidence. This good way of managing business finances is not only from financial records and is not limited to cash in and out. This is because it involves the assets and assets of the company that you will later pioneer.

These notes are made in detail and in an orderly manner to make it easier to read and understand. Sort this by date and time of making transactions, financial notebooks can be created manually.

Making a Budget on a Regular basis

How to manage business finances is not just about recording finances, making a budget or budget is also important in a business. This budget has the aim of limiting spending so as not to experience swelling. You should make the budget regularly, for example every month or every week.

Monitor Financial Cash Flow

The next tip for managing small business finances is to always keep an eye on financial cash flow. The purpose of this supervision is to prevent cash leakage.

It is not easy to monitor cash flow because it requires high accuracy. Basic accounting knowledge is also needed so that you can understand good financial cash.

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But you don’t need to worry because the BukuWarung application is now available. This application can be used to record books and save your business financial cash data.

The stored data will be processed and produce structured reports. With the help of the BukuWarung application, you don’t need to be confused anymore in monitoring the cash flow of your business finances.

Turn Cash Flow Faster

Good business financial management is also reflected in how you manage accounts payable well.

Turn your cash flow, many entrepreneurs have difficulty turning their cash flow, why is debt management related to cash flow turnover?

The cash flow cycle will also slow down if the credit sales period is longer than the credit purchase.

Therefore balancing the two is very necessary.

Use Profit to Grow Your Business

A business is said to be successful if you get a large profit. Instead of just spending it on personal needs, you should set aside the profit to grow your business.

From every profit earned for one month, set aside a minimum of 10% to be added to business capital. In this way, the business you are starting can continue to grow.

For example, you have a grocery store business. In each month, set aside the profits to buy more and diverse items.

Separate Personal Money and Business Money

No matter how small the business you run, you should separate the money used for business with personal money. The purpose of this separation is to prevent business capital from being used for personal purposes.

The worst thing when you keep combining business money with personal money is that the capital runs out without being noticed. This situation will make your business forced to go out of business.

Use a different place between personal money and business cash. You can separate them in two different wallets. It’s also a good idea to create a separate account specifically for your business.

You must also commit to not using business cash to meet personal needs.

Prepare Emergency Fund

We will never know what will happen to our business in the future. The worst things can happen. For example, natural disasters or revenue continues to decline due to the emergence of competitors.

Things like this can put your business in an insecure position. You need to set up a reserve or emergency fund to anticipate difficult times.

This emergency fund should be prepared from the start before you start a business. You should also use these funds wisely.

Do not use it in situations that are still under control. If you experience a loss, then these funds can be used.

Whereas in normal and stable circumstances, you can assume that this emergency fund is an advantage that you get from business.

Keep an eye on Assets, Debt and Capital

Every asset, accounts payable, and capital must be recorded in a structured manner. Because all of that can affect the continuity of the business you run.

Receivables are company assets and you must record them properly. Otherwise, you may lose company property without realizing it.

Debts that you have to partners should also be recorded, although the creditor also has his own records. This prevents double payments or unilateral claims by the creditor.

All goods owned by the company must also be recorded in the inventory log book. Check regularly to make sure the item is not lost.