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The success of your small business depends on more than sufficient capital and financing; you must also know how to properly manage your finances. Even before you open for business, it's imperative that you have a plan in effect for keeping accurate and up-to-date financial records.
4 Keys to Managing Your Business Finances:
1. Know the Basics of Financial Management
Learn to efficiently collect, track, save, and spend or invest your money wisely.
Poor financial management is one of the leading reasons that businesses fail, according to Business Owner's Toolkit™ Don't risk leaving financial management up to your banker, financial planner, or accountant; you need to understand the basic principles even if you plan to hire professionals to do the more complicated work. Here are some resources to help you learn more about financial management on your own online:
2. Learn to Use Your Financial Statements as a Tool
Your Balance Sheet, Statement of Income/Expense, and Statement of Cash Flow hold business insight.
Understanding financial statements is critically important to the success of a small business. According to the Small Business Administration, most business owners don't realize that financial statements have a value that goes far beyond their use to prepare tax returns or loan applications.
To learn more about what financial statements can tell you, start by attending the free, in-person BECU seminar Financing your Small Business where one of our Small Business Services Officers will help you:
Contact a BECU Small Business Services Officer to learn how we can help you with financing options, online banking, and other resources for your small business.
3. Invest in Small Business Accounting Software
Electronic accounting programs help you automate bookkeeping and analyze your financial statements.
"Keeping receipts in shoeboxes is not going to fly," says BECU Small Business Specialist Carol Friend. "A software program like Quicken, QuickBooks, or Money will enable a small business owner to more accurately and effectively manage their finances and forecast their economic future."
BECU recommends that you invest in an electronic accounting software program to help you keep accurate financial records for your business. Additionally, cash flow management programs can assist you in analyzing financial statements and understanding "what the numbers mean" for you and your business.
For more information about cash flow management tools and which one is right for your business, check out his AllBusiness.com Buyer's Guide. It provides a backgrounder on cash-flow concepts, an overview of software tools for managing cash flow, a short jargon dictionary, and some quick pointers about which business policies you've got to keep an eye on if you want to avoid cash-flow trouble.
Additionally, BECU small business solutions help make managing your money simple and cost-effective, so you can put more time into running your business.
4. Put Financial Professionals to Work for You
Consider hiring a bookkeeper and/or accountant, and actively network to meet the resources you need.
To get a grasp on your small business accounting and financials, you may wonder "Should I hire a bookkeeper, an accountant, a controller, or a Chief Financial Officer?" In actuality, each professional may be used at some stage of your business lifecycle.
"It's important to network to find the resources you need as your business grows," says Kathleen Tye, BECU Small Business Services Officer. "One of your best networking resources is right here at BECU. Our experts at business financing can connect you with helpful resources before you start your business, after your business has started, or when you are forecasting your future."
Whether you need help financing your small business or have questions about deposit accounts, a BECU Small Business Services Officer can help. Schedule your appointment to meet in person and discuss your situation.