If you are naive when it comes to financial matters, you could lose out. It’s not just about keeping accurate financial accounts; you also need to make sure that you do the right things with your budget.
From my own personal experience I can tell you that you don’t want to adopt sloppy bookkeeping habits or spend your money unwisely. So in today’s article I’m going to share 5 things I’ve done to look after my company finances.
1. Invest in the stock market
Investing in stocks and shares is an excellent way to secure finances for your business. If you know nothing about the markets, you can read advice pieces about how you can invest money.
The key here is to make your finances work for you. If you save your excess cash, you will find that it gains a little interest now and then. Instead, you need to make sure that you put some money into stocks so that you can make a massive return on it.
Ensure that you research the stock market before you make an investment so that you know what to do. You also need to consider how much liquid cash you should have on hand as well.
I’ve made this mistake in the past of setting excess cash aside and then not having enough left to pay the normal bills and other things like payroll.
2. Avoid Online Hacks And Scams
If your business tends to deal with clients and customers online, you need to figure out how to protect yourself. It might be worth running an identity verification test before you complete any transaction online.
Dealing with money online can be tricky, as there are hundreds of people out there who want to steal from your company. It is best to be wary when you deal with people so that they can’t scam you out of your profits.
You need to be careful when you deal with anyone online because you don’t know who they are. Phishing scams, hacks and transaction scams happen all the time, and so you need protection.
I can’t personally tell you how many times I’ve gotten emails, and phone calls from these scammers and as a business owner you will likely get a bunch of them.
I’ve gotten scammers pretending to be IRS agents saying they are going to sue me to fake utility companies saying they are going to shut my power off. More than that just be cautious of who you do business with or you could be their next victim.
3. Have A Saving Scheme In Place
Of course, every business needs an emergency fund if the worst should happen. You should make a plan so that you know how much you need to save each year.
Keep that budget safe and don’t dip into it unless you need it. You probably already have business insurance, but this extra level of protection will help you along the way as well.
If you find it difficult to save money, you should have an expert mentor you. There are many financial advisers out there, both independent or part of a group, who can help you stick to a budget.
I found this to be an issue for my business early on. With all of my overhead expenses it can be hard to save money in the beginning but if you have been around for a while and still have problems saving money for your business I found the simple solution is to just set up an account and start.
I found over time that starting anything is almost always the toughest thing to do but once you have it going it takes very little effort to keep it going.
4. Avoid Third Party Transactions
If you can keep a transaction between you and your clients, you will save yourself loads of money.
Much of the time, people pay a third party company to help them make transactions. For example, you might use PayPal to complete a payment. The problem with that is that these enterprises take a fee for themselves.
If you complete a series of payments each day, you will lose out, in the long run. If your business relies on credit or debit transactions you may almost always lose a percentage due to the third party transaction.
On way I’ve found to get around that is to accept checks. This can be a bit riskier and actually works better for me because I’m a business to business company.
However if you are more business to consumer your best option would be to continually be looking for the cheapest options available.
5. Work Out A Debt Payment Plan
If your venture is in debt, you need a plan to get out of it. Debt problems can seem tough to deal with when you run a business.
You can never hope to pay off all the money you owe in one lump sum. Doing so would cause massive issues for the stability of your company.
Instead, you should talk to your lender or bank manager. Explain your financial situation and ask them to help you create a payment scheme. That way, so long as you are turning a profit, you should be out of debt in no time.
No business can survive if you don’t take control of its finances. Educating yourself on money matters means that you prepare yourself for every eventuality. In fact, it is the only way to keep your company finances safe.
Have you ever dealt with small business issues?