Master Your Business Finances With These Essential Money Management Strategies

Money management and getting paid must be a priority in any business. If you’re a small business or a start up, you’ll need to familiarize yourself with basic book keeping, even if you hire an accountant to do year end financial statements and tax forms. Invest in account management software if you can.

Payment Terms

You need to establish payment terms with your clients, and although some flexibility may be necessary, monies should be chased promptly, with a good debt collection system in place. Ask for deposits if appropriate, and if accepting checks make sure you see a driver’s ID and write the number on the back. If it’s for larger amounts try to get a banker’s draft instead.

Payment Methods

You’ll also need to decide what payment methods you will accept from customers. Flexibility is key in this day and age, and accepting credit card payments has been shown to increase sales by up to 50%. Accepting online payments through PayPal and others can also make all the difference, but you need to take into account the costs involved in providing the various payment options.

Finance options

The most suitable funding options for your business will depend on several factors. How much you need, whether you’re willing to offer personal assets as security, whether you own a business property and whether you are willing to issue shares to investors. Once you have opened a business account, your bank may offer an overdraft facility or business loan. Major banks can however be stringent with funds now, so its worth looking at other options such as non-profit Credit Unions or small Community banks. With receivables financing, factoring companies and others will advance you cash in exchange for collecting payment on invoice sums due to you, usually for a fee of between 3 to 6%. If you store high value items, you may be able to use this as collateral for inventory financing, and crowd funding may also be worth considering.