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How to Organise Your Business Finances

  • 2 min read

  • Highlights

  • Organise your finances to stay profitable

  • Keep a separate business account for business expenses

  • Track your finances with careful accounting

  • Take the help of a professional for taxes and accounts

One of the dilemmas that business owners often grapple with is how to manage the business finances.
It is important to keep your finances organised, so that you do not lose out on the money. As you get involved in the daily operations, you may lose track of your finances. Here are some practices that can be followed to manage your finances.

Keep Your Business Accounts Separate

Having same account for personal and business expenditure, can lead to complexities in the long run. It becomes difficult to segregate accounting transactions and can adversely affect the business credit score.

A separate business bank and credit account will make it easy to prepare your taxes. Your business credit score will not be unduly affected by your personal expenses, if the business accounts are kept separate.

Track Your Finances

In the daily management of your business, you may lose sight of your expenses and payments received from the customers.  Do you have enough cash flow for your next marketing campaign? Is there inventory enough for processing a sudden order?  Have any of your clients failed to pay in time? Financial planning entails these and many other concerns.

In order to keep a pulse on the movement of your money in the form of cash or inventory, you could use several software, such as ERP, accounts software, inventory software and others.

A financial ERP (enterprise resource planning) is a software program that gives you updated business information - balance sheet, cash flow statements, Profit & Loss, ledgers, inventory movement etc on one platform. It helps you to track all your expenses and payments received/yet to be received from the clients. The chances of missed invoices, or payment deadlines are reduced drastically, thereby, reducing your losses.

How To Get Small Business Finance From Bajaj Finserv

Financial Habits that will help you get a business loan

As a small business owner, you need to stay on top of your business’s finances, in order to ensure that your business keeps running smoothly and never runs out of working capital for its day-to-day operations. Additionally, you need to ensure that you are able to obtain external financing for your business when the time comes for your business to grow, or take on a large project. Here, we give you a few financial habits that every small business owner should have, that help you get a business loan easily when the time comes for you to apply for a loan.

According to a 2017 study by KPMG in India and Google, digital small and medium business grow twice as fast when compared to non-digital counterparts. The report suggests that digitalisation could help them increase their contribution to India’s GDP by about 10%.

Along with various software programs for accounting, taxation, it is recommended to engage a financial expert to manage your accounts. Their advise, guidance and monitoring help to keep you updated on your money matters.

Preparation of Tax Liabilities

If you have been monitoring you expenses, it will be easy for you to estimate your tax payments and avoid penalties.

15 Minutes Every Week

A weekly review scores over an annual one. Which is your major cost guzzler, and where can the value engineering be initiated? Which is the major income source? Do you need a business loan? Just a few minutes of financial review every week could help you to weed out unnecessary expenses. Awareness of both the strong and the weak links in the business operations will help you make informed decisions.

These steps will help organise your finances and improve the business productivity.

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