Running a business is all about making your vision become a reality and doing whatever it takes to make your business succeed. To keep your company thriving, one crucial task you have to get right is the management of your company’s finances.
But the ability to manage business finances doesn’t come naturally – you have to learn it. With good financial management in place, you will be able to grow your business even further.
Here are 6 finance tips that can help your company grow.
1. Make a budget
If you want your company to be financially stable, you need to make a detailed budget. Creating a budget will help your company avoid bad debts, give you an idea of how the company’s finances are doing from time to time, and prevent you from making unnecessary purchases.
2. Start managing finances early on
When you first start a business, make sure you record everything, even when most financial records show zeros. You will feel the benefits when your business is running smoothly.
As your business grows, there will be even more work to do, and it may get harder to set aside time to keep proper records. By having a good financial management system from the start, you already have a system going. It will reduce your mental load when business is booming and you’re busy coping with orders.
3. Use (free) software tools where possible
Software can help many business operations become easier, for example creating invoices, point of sales, financial records, customer service, and so on.
There are many software tools in the market that can boost your productivity. Besides, digitalization and automation tools will also help to decrease human error that could lead to rework and even losses.
However, before you buy an expensive tool to help solve the problem, you should look for other cheaper or free alternatives. There’s a good chance you’ll find a tool with similar functionality and a much lower price, or even free of charge.
This will help you save a significant amount, since business tools often charge by subscription fees, and the cost can add up quickly.
4. Prepare an Emergency Fund
Emergency funds are funds to tide you through a dire time for your business. You can use them to deal with business risks, such as very slow sales, damage to production equipment, or even bankruptcy.
As such, you need to allocate some of your business profits to save as an emergency fund. Do the calculations to find out how much emergency fund is necessary for your business. After that, you need to set aside an amount regularly to build your emergency funds up to the predetermined amount you have worked out previously.
5. Reinvest Your Profits
Is your business generating huge profits? That’s great news! This is the best time to grow your business quickly. These profits must be reinvested as additional capital for your company.
You might be able to open a new branch, hire more people to keep the momentum going, undertake new marketing efforts, or even create a business-specific investment account.
6. Hire a Professional
You may be able to manage your company’s finances yourself, but once your business has expanded to the point where you have many employees or clients, it’s time to hire a professional.
By having good financial management that passes the audit process, you will be ready if an investor is interested in investing in your company.
Take The Next Step to Grow Your Business
So, we’ve gone through the 6 financial tips that you need to know for your business.
As much as you can plan ahead and spend according to your budget, sometimes that is not enough. Your business may need an external boost of funds to grow.
This is especially so when your business is doing well and you’re looking to expand more aggressively and quickly capture opportunities in the market. Often, these opportunities are time-sensitive. They might be gone by the time you’re financially ready.
If you’re in such a position, it may be wise to look into obtaining a business loan to enable the rapid growth of your business.
Xendit works with our licensed partners to provide business loans that are not only fast and flexible, but also gives you peace of mind. Our partners are licensed by the Financial Service Authority – Otoritas Jasa Keuanagan (OJK), and as such their business activities are strictly supervised by the OJK.
About Xendit
Xendit is a financial technology company that provides payment solutions and simplifies the payment process for business in Indonesia, the Philippines, and Southeast Asia, from SMEs and e-commerce startups to large enterprises. Amidst the fragmented payment landscape in Southeast Asia, Xendit enables businesses to accept payment from direct debit, virtual accounts, credit and debit card, e-wallets, retail outlets, and online installments.
For many businesses, accepting payment online is new territory, but we’re here to help. We helped 1000s of businesses come online and we’d love to help you too.
Find out more about Xendit, or sign up to try our dashboard!
