The benefits of managing finances properly will make businesses able to develop and compete. Learn 8 ways to manage business finances so that you don’t lose money below.
Maybe it’s not your income that doesn’t meet the target, but how to manage your business finances that needs to be improved.
Indeed, how to manage business finances properly? Is there an app that can be used to help with the process? Well, don’t worry about you. This article will answer your confusion. So, see the explanation to the end!
Why is it necessary to learn how to manage business finances?
Before discussing how to manage business finances, you need to know the importance of this.
In the science of corporate financial management, there are various ways to manage business finances. All for one goal, which is to create a healthy financial system, so that your company is still able to survive, grow, and compete with other companies.
On the other hand, if you don’t pay attention to how to manage business finances, the consequences that must be faced are reduced revenue, losing competition with other companies, or even going bankrupt. Therefore, it is important that you learn how to manage your finances.
Differences in how to manage business finance and personal finance
The company you run now is different from your own life. There is no exception in terms of managing finances. In general, there are 3 differences between managing corporate finances and personal finances. What are they? Here’s the explanation:
Financial goals
The financial goal of the business is certainly not to simply buy meals three times a day or shop for monthly necessities. That is a personal finance goal. The purpose of business finance is to get profits, then the profits are used to develop the company to achieve greater profits.
What if you take advantage of the company for personal needs? In general, company managers/owners usually get a monthly salary like their employees. So, there is a portion that has been measured for managers and the rest of the profits are used as the company’s operational costs.
Fund allocation
The allocation of personal funds is certainly different from the allocation of corporate funds. If you manage your personal funds, you can divide the budget items for food, household needs, and so on.
If you manage business funds, then you will generally allocate money for company operations such as office electricity costs, office water costs, company facilities, income tax, and so on.
Financial reports
When managing personal finances, generally people don’t always make financial reports every month. On the other hand, managing the company’s finances must pay attention to every transaction, then make monthly and annual reports on a regular basis.
8 How to manage business finances
In order for your business to continue to grow, there are 8 ways to manage business finances that you can implement. You can learn the explanation below.
1. Set financial targets
The first way to manage finances is to set financial targets. How much profit do you need to achieve in a month, in 3 months, or in a year. Make a realistic target!
2. Create a company budget
The second way to manage business finances is to make a monthly or annual budget. Write down what types of expenses are needed in one month, then make a nominal limit for each type of expenses. Try to transact according to the budget that has been made.
3. Pay attention to the company’s financial cash flow
The third way to manage business finances is to supervise/pay attention to the financial flow of your business. Record every transaction related to the company and determine who is authorized to transact with the company’s money to reduce the potential for corruption.
4. Separate personal and corporate funds
The fourth way to manage finances is to separate your own funds and company funds. Mixing the two funds is one step to push your company to the brink of bankruptcy.
5. Manage accounts payable
The fifth way to manage business finances is to control business debt. If you are forced to go into debt, then pay the debt on time.
In addition, if there is nothing precarious, you can pay the debt first rather than spending money on other things. Thus, your business will have healthy accounts payable.
6. Leverage profits for company development
Every profit counts. The next way to manage finances is to use profits for the development of the company. You can get greater profits because the company’s performance also improves.
7. Pay attention to approval contracts with third parties
Companies often collaborate with business partners or other companies. In the cooperation process, the approval contract was signed by both parties.
The next way to manage finances is to pay attention to approval contracts with third parties, especially in terms of finances. This is necessary so that you do not get deceived and lose money.
8. Make financial reports
The last way to manage finances is to make financial reports periodically. As mentioned earlier, you can make financial reports on a monthly basis as well as per year.
That way, the company’s transaction track record can be monitored and evaluated. The evaluation can be the basis for measuring financial goals and making the next budget.
4 Apps to manage business
If you have trouble carrying out the way to manage business finances above, there is no need to worry. You can take advantage of the app to help you manage your business finances. Just search for and get the application on the Google Play Store or Apple Store. Apps you can try include:
1. Financial transaction recorder application
In order to be able to see the company’s financial track record, you can use the application to manage the first finance, which is to record financial transactions. You just need to enter transaction data into the application, so that every month statistics that have been automatically calculated will appear.
2. Banking application or m-banking
The first application for managing finances is a banking application. Generally, banks in Indonesia have provided applications for the m-banking process. You can check your balance, transact with business partners, and so on.
3. Digital wallet apps
In the digital era like now, bank applications are not always an option. The first application for managing finances is a digital wallet. You can also check your balance and transact with business partners using the wallet.
4. Investment apps
The last application to manage finances is to invest. There are various investment options that can be run online, for example such as mutual funds, gold, stocks, and so on.
That’s a discussion of how to manage business finances, the difference between them and personal finance, and applications that you can use to improve the company’s financial system. Happy business!
