{"id":36864,"date":"2020-07-09T14:53:37","date_gmt":"2020-07-09T18:53:37","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=36864"},"modified":"2020-09-01T08:00:30","modified_gmt":"2020-09-01T12:00:30","slug":"finance-management-for-experts-5-tips-and-tricks","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/finance-management-for-experts-5-tips-and-tricks\/","title":{"rendered":"Finance Management for Experts: 5 Tips and Tricks"},"content":{"rendered":"
Imagine if there was a simple magic trick that helped one to manage their personal or business finances seamlessly. This would surely come in handy to the more than <\/span>60% of small enterprise owners<\/span><\/a> who claim that handling cash flow is tricky. What makes it tricky, in the majority of cases, is the fact that business owners don’t know how to calculate their fixed charge coverage ratio<\/a>, and it’s important to learn how to calculate it because it’s an important factor for lenders.<\/span><\/p>\n Finance management is one of the critical undertakings for the successful operations of any entity. From running your own life or small businesses to the operations of big unicorn firms, effective financial management can be the difference between continuous cash flow into a business and unforeseen business debts.<\/span><\/p>\n Some of the benefits of having a sound financial management plan for your business include;<\/span><\/p>\n While most small and medium-sized businesses are good at production and selling their services, finance management has always proved to be their Achilles heel. Luckily, we\u2019ve come up with 5 finance management tricks and tips to help you handle your business finances better.<\/span><\/p>\n <\/p>\n A business budget contains a documented financial plan for a specified period of time \u2013 ideally a year. Your budget helps you to map out all your revenues, expenses, and forecast future sales. A vital aspect of a budget is the Profit and Loss (P&L) statement, which is especially helpful when calculating monthly business finances.<\/span><\/p>\n A well-executed budget allows you to pinpoint and improve any pain-points in the business. Besides, it can act as a guide in your future decision making.\u00a0 However, the key use of a budget is to help you manage your expenses and, in the process, reduce costs.\u00a0<\/span><\/p>\n Most business owners leave their costs \u2013 both fixed and variable \u2013 unchecked. This only cuts into the business\u2019 profits leading to financial distress. With a well laid out budget, you not only reduce and eliminate unnecessary costs but also prioritize crucial expenses such as payroll and advertising.<\/span><\/p>\n On the other hand, having a budget in place will ensure you don\u2019t fall into the common pitfall of taking more than planned capital from investors and lenders. This has led to many owners losing full equity of their businesses.<\/span><\/p>\n The main take away here is to get a forecasted budget and stick to it. This will go a long way to helping you avoid unnecessary business moves. Also, remember always to review and update your budget regularly as your business\u2019 financial situation fluctuates over time.<\/span><\/p>\n <\/p>\n Documentation is a key part of the financial industry. More so, document retention helps your business maintain compliance with the various finance regulatory bodies such as the SEC or FIRA.\u00a0<\/span><\/p>\n The need for documentation means most businesses handle volumes of invoices, balance sheets, certifications, among other personnel records. Going through all these documents while searching for information can be time-consuming.<\/span><\/p>\n Research shows that the average worker in an organization will spend 30 to 40% of their time searching for records in the filing cabinets. Besides, big corporations are likely to lose a document every 12 seconds, which can have detrimental costs down the line.<\/span><\/p>\n The emergence of cloud-based business tools and digital platforms has allowed most businesses to roll out paperless platforms. Going paperless will help you;<\/span><\/p>\n With paperless document management, the continuous pressure on your finance and accounting department will be eased tremendously.\u00a0<\/span><\/p>\n <\/p>\n Most business owners rely on ad hoc reporting to perform financial tasks. This means having large transaction journals for managing ledgers, invoices, accounts payable, as well as business assets. However, this manual reporting is not only time consuming but also impractical. Take, for instance, filing taxes without easily available financial reports \u2013 a challenging undertaking.<\/span><\/p>\n\n
Create And Stick To Your Budget<\/strong><\/h2>\n
Go Paper-free<\/strong><\/h2>\n
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Invest In An Accounting Software<\/strong><\/h2>\n