If you are proficient with business administration, economics or finance skills, great! You have a big head start.
Do you need a bunch of spreadsheets? Not today, but as you plan your business, and it begins to grow, you’ll know how to use these! When you’re starting out, there are some basics areas where you need to learn as much as you can.
1. Bookkeeping
In very simple terms you need to keep track of the money that comes in and the money that goes out. It may sound like a simple thing, and it might be in the beginning, but you’re not starting this business to run for a month. Hopefully, you’re starting this business to last for a long time.
It’s a very good idea to put a smart small business finance accounting system into place from the beginning and get it set up to grow with your business. You will find a resource page below with some basic accounting systems that are affordable and easy to use for small business finance.
2. Purchasing
You will need to buy things for your business. In the beginning, it’s important to focus on how you pay for these items. If you’re using your credit card, no problem, but watch the finance charges. Try and keep the outstanding balance on your card down to a minimum.
If you are making most of your purchases online, then find a good payment tool or gateway that you can use to pay for purchases while at the same time collecting money from your customers
3. Credit and Collections
You need to make sure you get paid for your product or service. How this happens can vary greatly based on the type of business you run. If you’re just starting out, you will probably not offer your customers credit terms, more likely it will be cash on delivery.
For this, you need a payment tool that your customers trust and one that will allow you immediate access to your money. There are many online payment tools and gateways, like PayPal.
One important note, it is a very smart idea to use a payment tool or gateway that also offers you the ability to download transaction details into your accounting package. This saves you loads of time manually entering information into your small business finance software package and has many additional upside advantages.
In conclusion, it is important to note that financial analysis is not a huge issue in the beginning, because if you’re like most new businesses, there will be very little to analyze. Get the Small Business Finance Basics right, and the rest will follow with much greater ease.
Ignore the basics, or do them wrong, and you’re asking for problems later on that will distract you from your primary function as a business owner which is finding and keeping customers!
more topics in financial management at our business center
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