5 Practical Financial Tips for Small Businesses

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Financial management is crucial for any kind of business, small or established. However, when small businesses are concerned, bad financial habits can cause harm to your business. The most important thing to do for any business owner is to educate themselves by understanding basic financial and accounting tasks, drafting financial statements, and so on. Apart from staying educated, organizing your financial statements, records, receipts, and expenditure is also essential.

Here are five tips for better financial management:

●     Focus more on growth.

It's essential to keep money aside to upskill and grow your opportunities. A small business needs to look out for opportunities to grow and thrive in a financially healthy direction. This is to keep an eye out into the future - how are you going to innovate, what values can you offer your customers, and how can you make things better for your employees? Investing in growth and upskilling on the customer and employee section will create more value for your business as a whole.

●     Create a good billing system.

Small businesses have to deal with consistently late payments and invoices. Part of managing a small business means dealing with cash flow to ensure that your business continues operating day-to-day at an optimized level. If you often find yourself constantly having to deal with late payments, then it's time to reinvent your billing system. Look into your existing system and plan for a more streamlined approach to your invoicing and billing.

●     Clean up your tax payments.

Another aspect of small business finance is saving for your quarterly estimated tax payments. If you find it hard to meet the quarterly payments, then pay your tax payments like your other monthly expenses. You can use a tax return calculator to help you calculate your taxes. Simply click and follow the instructions, add the amounts, and the calculator does the heavy mathematics for you. 

●     Focus on expenditures and ROIs.

You must also continuously monitor your returns and your expenditures, so that you have a clear idea of whether your investments make sense or not, and if it's worth continuing. Ideally, you need to be prudent of where you spend your money. Knowing where you spend and where you invest in is a constant initiative that you need to work on for the benefit of growing your business and ensuring you have enough resources.

●     Set up good financial habits.

Establishing healthy financial protocols is as simple as creating systematic spreadsheets, setting time to review and update your company's financial systems, and ensuring that you help mitigate fraud or risks. This also involves meeting with the teams or individuals responsible for managing cash flow, paychecks, and taxes on a frequent basis.

Bottom Line

Planning ahead is always good when it comes to finances and basically any other aspect of your business. You'll have much to lose if proper financial planning wasn't put in place. Setting aside time and effort to create processes, speaking to your team, and having the right documents are all foundations for better financial planning.

If you're a business owner and in need of resources, here are our top recommendations to set you up for success:

- Secure your business through worker's comp insurance from Cerity 

- Top rated grants, programs, & financing for your small business.

- U.S Small Business Administration, SBA.gov

- Read about Why It Matters To Do What You Love