The main aim of every business is to generate profit. To achieve that goal, a lot of creativity and thought must be put in along with hard work and determination. Once the business starts generating profit, you can develop better products, offer good customer service, and gain more assets. However, you can quickly lose all the profits you have gained over time if you do not yet understand how to master and manage your business finances.
The outlook towards managing business finances has changed over the years. Today, managing business finances means the use of money is vision-oriented. Financial managers have growth, sustainability, and confidence to take risks. This simply lets businesses create a path for product or service engagement along with funding. And therefore, it becomes crucial for business owners to master the art of financial management.
Here are six stages that you can take to help you handle money smartly:
Stage 1: Claim your most valuable asset
There is a reason people believe that “time is money,” which is why poor time management equals to wasted money. Make good use of your time by creating a list of your tasks. Focus on what’s urgent and what’s important. Then, prioritize your tasks by this urgent/important matrix. Know how to delegate work.
Stage 2: Set measurable targets for your teams
The growth of an organization is directly related to the increase in workload and the number of employees in the organization. Implement principles such as setting SMARTER (specific, measurable, attainable, realistic, time-framed, evaluate, and re-do) into your work system. This method will help you run your business smoothly without outside intervention.
Stage 3: Pay your employees and suppliers on time, every time
Your employees are one of your greatest asset. They work for money just as much as your suppliers do. Paying them on time, every time will ensure loyalty and you will have a better retention rate and engaging relationship with them.
Stage 4: Master your company’s cash flow (once and for all)
Keep an eye out on the company’s cashflow. This is the cash that is coming into your business. Communicate with the people who contract business from you. Be sure to update them and have some knowledge about the finance and accounting departments as well. Create a forecast for the next 6 months or the next one year of what you want your company’s cashflow to look like.
Stage 5: Manage your finances on the move
When you travel, make optimum use of tools such as spreadsheets and the cloud. It becomes easier to keep track of sales and expenses and gives you easy access to all the data you need without the constraint of location.
Stage 6: Use reliable financial insight to accelerate growth
According to the Paretto principle, (also known as the 80/20 rule) 80% of your sales comes from 20% of your customers. Identify these customers with the help of your financial reports. This will help your company speed up the process of generating profit.
To stay in business for the long-term, to have loyal and happy customers, and to have engaged employees, it is imperative that business owners master financial management. It is worth the time spent and the decrease in sleepless nights.
Want to master your business finances? Click the link below to watch a quick video and to download the whitepaper 6 Stages of Smarter Financial Mastery in Business