A few tips for managing your business finances

A few tips for managing your business finances

Finances for some it is their strong point and for any action, they guide them, for others finances represent a brake and they panic. Sometimes they even do not open the mail related to the invoices and they sit in the sand until the moment when it is no longer possible for them to procrastinate. Finances as they say “is not my thing”. !

Indispensable for a company, controlling finances makes it possible to control growth, to properly orchestrate the launch of new activities or to anticipate difficult situations. Cash is the heart of a business and it remains essential to manage it well. Whether you’re just starting out or not, having the right tools is essential.

What is business finance?

The main objective of the finance function is to perfect the financial resources of a company. It makes it possible to carry out an assessment of the threats which weigh on the company. Large companies, investment and network banks, institutional investors are used to it. The people who take on this function, such as financial executives or treasurers… are often linked to the DAF or Administrative and Financial Director. Banks, for their part, are (in general) under the responsibility of a director of financial studies or even a director of the credit offer.

The finance function for the good of the company

This function makes it possible to intervene in a more preventive than curative manner. It ensures the proper functioning of the company and anticipates payment defaults. The finance function also helps a company to better anticipate the needs of the company in order to face the many difficulties which could arise in particular in the event of cyclical activity.

Tips for managing your business finances

To manage your cash flow well, here are some solutions.

Make predictions

Forecasting allows a company to leverage its resources. It allows you to visualize whether your cash flow will hold up and helps to better make important decisions, such as when to invest. Before performing it, you must first examine the turnovers that you have generated in the previous months
or even previous years. You should also analyze recent sales as well as those that have not yet renewed. Forecasting remains a complex exercise and you will have to take a margin of safety to ensure that you will not find yourself in default of payment.

Monitor your investments

Just because your cash flow is full this month doesn’t mean it will be the same all year. Monitor your investments and their impacts, allows you to discern in time the problems or falls that you will encounter in order to find solutions as soon as possible. Investments only have an impact over time.

Use analytics tools

They will allow you to put the points on the activities in particular on the profitability of each one. In this way, you can be able to calculate your margin by activity or product/service. Data such as sales, cash, inventory turnover, assets and net profit remain paramount. They allow you to make the right strategic decisions. You can still measure different factors such as profitability, indebtedness, solvency as well as efficiency.

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