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The Best Small Business Management Tips From 31 Top Entrepreneurs

No business owner likes being strapped for cash, but mismanaging cash flow happens. Nearly half (42%) of small business owners report that handling cash flow is challenging. If you’re struggling to control your small business funds, check out the money management tips in this article.

What is financial management for small business owners?

Money management is the process of handling your business’s finances through budgeting, setting goals, tracking expenses and income, and investing.

With a sound money management plan, you can avoid periods of negative cash flow and ensure your business is on track to turn a profit.

Failing to wisely manage money can lead to problems like making late payments, running out of money, and not collecting on your accounts receivable.

Money management tips

To keep business operations running smoothly, you need enough money to cover expenses. Put these nine tips to use to learn how to manage money in a small business effectively.

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1. Stay on top of deadlines

If you don’t know when your bills are due, such as accounts payable, business loan payments, or credit card payments, you might not have enough cash on hand. Not to mention, failing to know when bills are due can set you back with late fees or added interest, lower your business credit, and sour lender and vendor relationships.

2. Monitor spending

It’s easy to use your business credit card, debit card, or checks to cover small expenses. A little lunch for the staff here, a new coffee machine for the breakroom there… But small expenses add up. If you don’t keep an eye on your spending, you could be fitted with a sizeable bill that you aren’t prepared for.

3. Don’t forget about accounts receivable

If you offer credit to customers, you’re well aware that you might not receive money for goods sold or services provided until the due date or beyond. After a week or month, it can be easy to forget about accounts receivable. But if you want to better manage money, you must remember the funds owed to your business and pursue payments.

4. Separate business and personal funds

Do you have a separate bank account for business? Even if you aren’t required to separate business and personal funds, doing so is critical to money management. Plus, business bank statements are useful for tracking profitability, reconciling your books, and monitoring spending.

Two money management tips are straightforward but can be hard to accomplish: decrease expenses and increase income. If you’re having a difficult time managing business funds, look for ways to cut costs and increase revenue.

Do you know how to control expenses in a company? To cut costs, first analyze your expenses. By looking at current expense areas and amounts, you can scale back and eliminate frills. You can also decrease expenses by shopping around for new vendors.

You can increase revenue by offering discounts, promoting products through email marketing or social media advertisements, adding new products to sell, and establishing refer-a-friend and loyalty programs for small businesses.

Keep a small business cash reserve to help you manage money when you’re in a pinch. You can start a cash reserve by opening a business savings account. Be sure to regularly deposit into your cash reserve.

If you want to simplify money management, keep up-to-date accounting books. Patriot’s online accounting software gives you a simple and affordable way to track incoming and outgoing money, monitor receivables, send invoices, and more. Get your free trial today!