Establishing good money management is an important step in securing your company’s success, no matter if you run a startup business 3 months old, or a well-established company being on the market for many years. Even if you decide to hire a professional bookkeeper or an accountant, you should still cover the basics if you wish to lead your company properly. Here are 6 tips on how to manage money:
Opening a bank account for your newly founded business is probably the first step that needs to be done after official registration of your startup. Finding the right bank with the best terms for your business may be slightly time consuming, yet it’s very important. Make sure you dedicate enough time and attention to the terms and conditions each of the banks offers so you could make an intelligent choice. While obtaining all pieces of information, make sure to check on optional credit limits, credit card options and other small business services.
Provide as many means of payment for your clients as possible. All companies in early stages of their development need to go the extra mile in order to get new clients and keep the existing ones happy. When it comes to payment options, customers simply expect some flexibility. Having only cash as your payment method or accepting only credit/debit cards is not enough anymore. The more payment options you have, the more clients you will get. Yet, be aware not to provide too many options which will make your income scattered among many different systems thus making it harder to track transactions.
Share the burden whenever possible. As a company owner, you probably have a strong need to stay on top of all income and outcome transactions in order to ensure success of your business. However, sometimes that can be extremely overwhelming; hence, ensuring assistance in this area by an external bookkeeper or accountant is a great idea. Of course, if you have just registered your company, you probably do not have enough financial resources to hire a full time employee to manage that part of the work, so occasional supervision done by a professional is an excellent option. Hiring an accountant to go through your bills and tax forms once in a while is a smart choice, as well.
Establish a budget for all projects and departments. If you deal with multiple departments in your company or you have many ongoing projects covered by different team members, then it is crucial to have a strictly defined budget covering each area. A clearly defined budget can efficiently rein different expenditures and keep your company costs under control.
Assign money you have to specific goals and purposes. Experts frequently point out that the money you do not assign to a specific goal is more vulnerable to reckless spending. Consequently, it is a wise idea to have each dollar allotted to a specific objective which clearly shows to all your associates and employees that you do not have money to waste. Ultimately, splitting up your income among costs and various projects should help you stay on top of all expenses. On the other hand, this should not stop you from possibly having a secret/reserved stash for tough times any business experience occasionally.
Have a wise debt collection routine. Inevitably you will have to deal with clients that forget or try to avoid paying on time. Therefore, it is optimal to have a well-developed routine process for such cases. Carefully examine your best options that may slightly differ depending on your industry or circumstances and persistently enforce such debt collection routine. Legal intimidation is not always the best choice, so first try with a set of pleasant reminder calls, emails or personal visits. Moreover, by consistently reminding your client that it is in their best interest to keep your business relation in a good shape, you can achieve a very solid debt collection rate. As a last resort, if no other options available, remind your client of possible legal repercussions if they fail to pay for your products or services.