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Tips for Better Business Financing

Surely, you’ve heard stories of business failures due to mismanagement of finances.

Though most entrepreneurs have what it takes to venture in the industry, not everybody faces the reality of handling the business budget.

According to the report of ABN AMRO Commercial Finance, more than half of their respondents believe that SMEs feel like they’re not in control of their business financing affairs.

What they don’t know is that the more they disregard this aspect of the business, the more they increase the chance to fail miserably.

Running a business is just like sailing a ship. The captain must be prepared to conquer the rough sails and do whatever means necessary to survive.

 This is the same with being an entrepreneur, you won’t just let your business sink into doom when you encounter hurdles along the way. This is why one of the toughest aspects to handle in business should not be overlooked - finance, that is.

So, to avoid failing miserably in growing your business wealth, here are some tips you need to know to have a better business financing!

Finish your paperwork on time.

We all know how hectic it is to be an entrepreneur. You have to meet with clients, suppliers, and employees. You have to study and be updated in the industry. But with all these, finances must not be overlooked. Paying penalties for missing tax deadlines does not make for good business IQ.

Know your financial position.

As part of the business, you should be aware of where your business is and where you envision it to be for the following years. This will also include your financial targets and forecasts throughout the operations. Set standards: know how low can your finances get. Consider this as the financial limit and anything lower will lead to failure of your business. This will especially be crucial should you decide to get a loan for business development because then, you have to factor in loan service as part of your allocation.

Monitor your financial progress.

Following the step above, the next step will be monitoring your progress regularly. This should be part of your job as the owner. Always review: How much money flows in and out of your business? Is your sales on a steady or significant increase? Is your cash flow fluctuating? Does your financial position right now align with what you set in your business plan?

Your personal finance is not your business finance.

And vice versa. Yes, the money from your business’ bank account can always come handy and you can easily pay it after using your personal money. But stop right there. If you don’t want to end up in a complicated record of your spending, just don’t do it. What’s the sense of separating your personal and business bank accounts if you are only going to use it interchangeably?

Befriend your accountant.

You are a business person because you are not an accountant. You are a business expert, the same way an accountant got expertise in handling finances. Makes sense? This is why no matter how tempting it is to cut costs and make your finances a DIY thing, hiring somebody who knows how to manage finances and abide tax policies will be a more cost effective solution than to commit penalties.

Treasure your records.

When you treasure something, it means you are going to keep it neat and clean. Maintaining your financial records organized and tidy can save you a whole lot of trouble when the time comes you’ll need to look for something. Also, this way you can easily see unpaid invoices that will affect your business if it adds up. Well-kept copies of checks, bills, and receipts can also be of great help in determining the overall spending of your business.

Immediately address problems

What’s even better than immediately finding a resolution for a problem? Once you notice something off with your operation, resolve it at once. Or you’ll risk problems adding up over time and it will be more difficult to address them.