Managing finances properly is one of the biggest keys to success for business owners.
While many people focus on creating new ideas, developing new products and then selling those products, most businesses fail because of poor money management. Scott Crockett, Everest Business Funding’s CEO, says it’s vital that business owners have a set financial plan from the beginning so they can always stay on track. In this article, he shares five financial tips that every business owner should remember.
Tip #1. Keep a Budget
The most effective way to not run your business is to keep a detailed budget.
Every year, create realistic projections for what your financial future will look like. This exercise should include projected sales and projected expenses, and account for unexpected situations.
A well-detailed budget will serve as your financial blueprint for the year. When making investment decisions, you should constantly refer to it so you don’t spend when you won’t have cash on hand.
Tip #2. Automate Payments
You have enough to do as a business owner to not have to worry about remembering to make all your debt payments. Even if you have an accountant or an accounting department to handle these tasks, they can bog down the process quite substantially.
By automating payments that occur on a regular basis, you’ll be removing a lot of manual work. This will free up yourself — or your employees — to handle much more pressing matters that can actually make, or save, your company money.
In addition, it’ll ensure that you never miss a payment.
Tip #3. Go Paper-Free
Eliminating paper statements is a great way to save the environment, but it’s also great for streamlining your finances. Paper causes confusion, and confusion can lead to things going wrong.
By going paper-free, you’ll be able to have a digital trail of every statement. Depending on how advanced your technology suite is, you may even be able to integrate invoices into your accounting system automatically.
If you can do this, you’ll be eliminating more manual work and potential large mistakes.
Tip #4. Protect Against Fraud
Fraud can be extremely costly to any business. Unfortunately, the advance of the digital age makes it easier for bad actors to commit fraud against you.
The first step is to ensure all of your financial accounts have fraud protection set up — if it’s something you need to do manually. Next, set up two-factor authentication for all your financial accounts so only those who truly need access will have it.
Finally, make sure you have sufficient security solutions for your in-house IT. This will keep the data you store on your servers safe from hackers.
Tip #5. Prepare for the Future
If you aren’t preparing for the future, then you are just preparing to fail. Business owners can’t lose sight of the present, of course, but they should always be focused on what’s ahead.
You’ll never be able to predict the future exactly, but you can eliminate some of the guesswork by properly forecasting and studying trends from the past.
The better prepared you can be for what’s ahead, the more financially successful you can be as a business owner.
Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett’s track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.