Organisations must have flexibility, adequate planning, and organisational skills to succeed in today’s business world. The latter skill is arguably one of the most important for business survival and growth, especially regarding finances. Without adequate planning, monitoring, controlling, and organising your organisation’s financial resources, your business’s objectives will not be achieved.
Supposing improvements aren’t made within this area, poor financial management can lead to several consequences varying in severity. Such as the inability to pay suppliers, late or unpaid debt repayments, inability to purchase new inventory, unpaid staff wages, loss of contracts, and much more.
To prevent any of the above from affecting your business, it’s essential that you make financial management one of the critical processes in your organisation and that you refer to your resources when planning. Especially if your business is small or you haven’t had much experience managing finances, it can feel daunting to tackle your finances.
Still, fortunately, there are many ways of doing so, from attending a managerial finance course to hiring experts. In this article, we list several of our top tips for small businesses looking to improve their financial management skills so that you can start building a stable financial future for your organisation.
Maintain Good Business Credit
It will be imperative for your business to be in good financial health. If your business is in good financial health, then it will find it easier to work day-to-day. If your business is struggling, then this will negatively impact the business in all areas.
Therefore, it is essential that organisations can source finance quickly, which is vital for creating and building a business credit profile – or maintaining a good business credit score. Managing your credit score is especially important as banks, lenders, and other credit providers will use this information to determine whether your future finance applications will be accepted or not.
Poor business credit can make it increasingly challenging for your business to take out loans to facilitate plans like purchasing more real estate to expand your premises or purchasing new equipment to make operations more straightforward.
To avoid this, maintain a good business credit score by closing bank accounts you no longer need, limiting credit applications, filing returns before the deadline, keeping up-to-date financial information, paying your bills in full and on time, and paying off all your debt funding as soon as possible. If you must seek financial aid, ensure that you do so with reputable companies that you can quickly repay.
Invest in Growth
When business is good, the temptation to sit back and enjoy the profits is strong; however, the best companies constantly look for new ways to improve. Whether by altering existing products to make them better, or by adopting more efficient business practices. Organisations need to set aside funds so that growth opportunities can be explored.
If you are able to invest funds wisely, then you could help develop your business further. As well as providing business benefits, investing in growth opportunities can help companies to attract and retain high-quality employees, increase customer satisfaction, create more value for your business, and show existing employees that their careers are being invested in.
An alternate way of investing in business growth is by taking advantage of online learning through video streaming services, video conferencing, self-paced learning, and online courses. Due to the massive influx of businesses switching from traditional teaching/training methods to virtual ones, companies can find online courses on any business-related subject. From a managerial finance online course to a data analysis for management online course – there are hundreds of online learning opportunities to help businesses gain insight or inspiration about their company and how to expand it.
You may have many questions if you have limited online learning experience. Like, what is managerial finance? How do I choose a course? Can I enrol in multiple classes at the same time? To find the answer to these questions, consider visiting course providers directly. You can visit the London School of Economics and Political Science to browse their managerial finance online certificate course, which displays their complete course directory and many informative resources. Visit their website for more information and see how a managerial finance online certificate course could help your small business improve today.
Have a Business Plan
Preparation is crucial for ongoing business success, and the key to that preparation is a business plan. A business plan is a written document that outlines the business’s goals, the methods for achieving them, and a time frame to reach them. In short, your business plan should include everything from a business summary to financial details.
Detailing your financial goals within your business plan is essential, as it will help determine how much money your business will need and where it will come from. Your financial plans should help you understand how to allocate your resources wisely and if financial obligations can be met without dipping into reserve funds.
Additionally, your financial plan is helpful when asking investors to support your business, as it will show potential investors how your organisation manages its expenses and generates profit. Through this data, potential investors can determine where your business stands and how much finances your company will require to achieve organisational goals. If you’re unsure how to draft a business plan, you can find a range of templates and advice online to help draft one.
Ensure You Meet Tax Deadlines
Deadlines are another essential aspect of a business. Known for marking the completion of assignments or projects, deadlines are also a necessary part of time management which is a vital part of a working day. One of the most critical business deadlines is bill repayments and tax deadlines.
The latter can cause various unnecessary monetary problems for businesses, such as fines and interest, which can easily be avoided through careful planning. To prevent this, ensure that you have a dedicated team that keeps your business records up-to-date and organised so that you can rest assured that you are only paying the tax your business owes.
Additionally, if your business worries about saving enough for its quarterly tax payments, you could consider making it a monthly fee. Doing so will enable you to treat tax payments like other business expenses such as utilities or internet connection.
Manage Overhead Expenses
Looking at how your business operates is another way that your business can improve its financial management. It’s no secret that physical companies have an abundance of equipment and office space that requires utilities such as heating, cooling, and electricity for the business to operate at its best. It can be easy to overlook these minor overhead expenses when focused on the bigger picture, but often doing so loses the business more money.
Overhead expenses are one of the easiest ways to start cutting costs, so it’s essential to look at your current usage and how it could be improved. For instance, do your staff members switch on an electric fan instead of opening the windows first? Or are any computers left switched on overnight? If so, this could be the answer to your growing utility bills and acting against little things like this can save your business a lot in the long run.