To help you avoid financial problems or even losing your business, here are some money management tips. Don’t neglect this crucial area, especially if you’re new to money management. Remember that making money, not losing it, is the number one reason you are in business.
Money Management System
You probably don’t want to spend hours keeping complicated records, but you do need to spend a little time setting up and following a system to manage the money coming in and going out. This would help you avoid future money management mistakes.
Money management ideas and skills are vital to the success of your business, so it should be one of your top priorities. Here are some basic money management tips that will help make this area easier and more effective:
Money Management Strategies
software – Money management software is the easiest way to keep track of your home business finances. You can track all your checks, schedule payments, and create a budget (Accelerate by Intuit is ideal for a one or two person business). Determine your business needs and select the most appropriate software to meet them.
bills – Word processing programs such as “Microsoft Word” or “Lotus AmiPro” provide you with templates for creating your own invoices.
business account – Open one at a bank with your registered DBA. Don’t mix your business money with your personal money. To find a good bank, ask for references from other business owners. Depending on frequency, you should update all your bank movements once a week or once a month.
cash flow – It is the lifeblood of your work at home. To maximize your cash flow, you should collect services or products as you deliver them. The easiest way to collect money owed to you is to provide credit card payments to your customers. However, occasionally you may need to extend credit, check your customer’s creditworthiness and make it a habit to follow up on overdue payments promptly.
Create a budget – A budget is a record of your planned income and planned expenses for a set period of time. You plan your finances and then track whether you are working according to your plan. Compare your planned income and expenses with the actual income and expenses every month. Before making any purchase, ask yourself if it will help you improve your business or set you back. Budgeting is one of the areas that gives you more control over your money.
cash reserve – Every business has its ups and downs, so you need to guard against the “slow” times. A cash reserve gives you a cushion to get you through these tough times. Depending on your budget, you should have a cash reserve equivalent to at least 2 or 3 months’ spending.
Money management tips
Managing money boils down to exercising discipline. Either you control the money or the money controls you. Good money management will greatly improve your chances of success. They have many helpful money management tips resources and articles online to help you on the subject. Best of all, they’re FREE!
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