Introduction
Mark Roemer Oakland believes that sound financial management plays a vital role in every business. Without a financial plan, businesses are bound to fail. Every year, you can see new start-ups coming, but only a few of them make it big, and it’s simply the lack of cash that causes their downfall. Mentioned below points will help you get a clear understanding of managing small company finances:
The Details
- Financial decisions must be made right from the beginning- There is no bedding-in period for making the financial decisions. Some are financially literate, while some lack the required knowledge; whatever the case may be, you need to start making crucial decisions right from the off. You can opt for resources to guide you in managing these financial tasks.
- Managing and tracking cash flow- As the name suggests, cash flow refers to the follow of cash in and out from your business in a certain period. Going in and out of cash is a constant process in every business. Positive cash flow is when you receive more income than you are paying, and negative cash flow is when your expenditure exceeds your income level.
- Importance of tracking cash flow- As mentioned above, lack of financial management is one of the most common reasons for the failure of businesses. Even the most successful businesses get in trouble when they don’t have a proper cash flow. So, it is crucial to keep a close look at the cash flow and manage accordingly.
- Cash flow statement- The best way to keep track of your cash flow is to create a cash flow statement. It is a straightforward document by which you can keep a close eye on your forecast monthly cash flow. You must note if your accounting software has a feature for maintaining the cash flow statement. Even if the software has no such feature, you can easily create a cash flow template by yourself.
- Choose appropriate payment terms- One of the most common reasons for cash flow problems is not choosing an appropriate payment term. Late payments often cause difficulties in business, and you should handle them with proper strategies. For instance, you can charge interest or late fees to manage these issues effectively.
- Be selective about who you work with- You may invest a month providing services to a customer, and in the end, he refuses to pay. Fighting a legal battle can cost you a considerable amount and so, it is better to be cautious about who you work for.
Conclusion
According to Mark Roemer Oakland, at some point in your business, you will be in need of business finance. It may be for dealing with some cash flow problems or for funding the growth of your business, and you have to keep calm and deal with it positively. There will be many funding options available to you, and you just need to do your research before you come up with any decision.
