Looking for a Financial Action Plan to Control Your Small Business?

If you want to keep the cash flowing into your business, it is important that you are aware of all the financial affairs. Not only does it help you maintain a safe financial state, but also helps you avoid unanticipated business debt. You can accomplish a stable position to invest in business expansion plans.

1. Manage Business Account: to manage the account, you can take the services of a competent bookkeeper. Purchasing accounting software is another good option to keep track of your investments and profits.

2. Assess Business Cost: It is essential that you keep the record of your business expenses to assess invested money.

3. Design Financial Projections: Designing a clear financial action plan will assist you to anticipate your business obstacles and you can work out a plan for it.

4. Be Active for Invoicing:

• Keep track of who you provide service to. Send them invoices once you provide services.
• Set and adhere to the fixed payment terms, which should not be more than seven days. It will help you keep the finances in the process.
• Payments follow up is a must. Create templates, automatic SMS or email to follow up invoices.
• Keep the reference of invoice numbers to cross-check them with the due payments.

5. Make a New Bank Account for Business Payments: If you want to stay free from a tax headache and inexplicable losses, avoid mixing your personal finances with your business finances. Not only will it help you gauge profitability conveniently but also track your business expenses.

6. Get a Business Credit Card: Having a credit card specifically designed for business owners will save you money in the long run and help you manage your finances. Business credit cards have a higher credit limit compared to other types of cards, and you get exclusive perks and rewards for your business. To make the process easier, you can compare business credit cards at CompareMyRates all at once, without having to manually do research and reviews.

7. Maintain a Record of Personal Business Loans: Keep a business loan record to stay abreast with your financial status. With an accurate record, you can pay back the loan before paying business tax on the profit.

8. Use Your Profits for Yourself: Using all your profits on yourself is not what we mean here; you can start with 5 to 10 percent earning first. This way you can save money consistently and evaluate your business profitability and can pay unexpected expenses of your business.

9. Be Frugal with Your Profits: Taking advantage of your business money as an owner is not a good deal. It is better that you set yourself a fixed amount and use government-mandated advantages only. This tip will help you become flexible in terms of saving money for the future.

10. Keep Your Traveling Cost Minimal: Make sure that your traveling cost on business trips is minimal. Be economical while choosing hotels or traveling package. Try not to overspend on hefty accommodations or luxurious hotels. This will not impress anyone- mainly your employees and cost you an unnecessarily large amount with no profit.

11. Maintain Legal Fees for the Business: An average amount for a legal service is around $450. This is how you can manage this;

• Discuss your expectations and business deals clearly with your lawyer before procuring legal services.
• Select the most cost-effective business billing option, for instance, hourly payments.
• Discuss the possibility of payment deferment until your project is financially aided.

12. Manage the Business Expansion Cost: It is important that you devise business expansion plans in advance. Investing a large amount in business that is drastic can be dangerous.

13. Invest in Renting Instead of Purchasing: This is the best way to avoid maintenance costs. Consider leasing instead of purchasing, it will save your money and maintain additional expenses on the equipment you need for the limited period. Similarly, you can rent your office to make expansion or relocation hassle-free and easier.

14. Apply for Loan Before Any Financial Instability: Applying for a loan before you face any financial instability in your business is the right way to avoid ‘waiting for loan’ while facing financial trouble. Apply for a business credit when your financial state is stable and good. This way you can use the credited amount on business s expansion or deal with any emergency situation.

15. Calculate Your Capital for a Safe Business Startup: This is one of the common problems most small businesses face. They lack enough capital amounts to get through the business startup phase. To avoid this, it is essential to save 3-4 months business expenses or the amount of capital you think you will need during the start-up phase in advance. Plan wisely if there is no business revenue in the startup phase.

16. Avoid Spending Prematurely: Be wise with your decisions of spending on business cards, marketing materials, inventory, sign writing or cars before you make profit or revenue. This will block the cash flow.