4 Smart Tips to Manage Your Business’ Finances

When it comes to the financial management of your small or medium-sized business, you’ll need to be in the know of basic terms and strategies. Not all businesses can afford to do a financial overhaul, but they can modify their daily financial practices that will make significant improvements.

Brush Up on Your Lingo

The business world has its own terminology, and without knowing the buzzwords, your business will not fare well in keeping up with the competition.

Some common terms to know include:

  • Balance Sheet. A balance sheet is your best friend. It’s a major financial document because it lists assets, liabilities, and the capital of your business within a certain period. The information it provides is crucial because it helps banks determine if your business qualifies for a loan or additional credit.
  • Liabilities. This consists of any financial expense or amount owed, such as products or services bought on credit from a supplier. This falls under the category of “Accounts Payable”.
  • Assets. This consists of items you own, including cash and items converted into goods. Common assets are inventory, vehicles, property, and supplies often made possible through manufacturing finance loans.
  • Gross Revenue or Total Revenue. Gross revenue is the total amount of money you made from clients who have purchased your products or services. Gross revenue is also called “total revenue” because it is the amount before deductions and expenses are applied.
  • Expenses. This consists of products or services that you must pay using the money of your gross revenue, such as rent, payroll, utilities, and taxes.

Don’t stop here! If you want your business to stay in the game, you need to keep up with trends and innovations on a regular basis.

Separate Business from Personal Expenses

Some business owners don’t manage their business’ finances well, so they turn to their personal finances in a pinch. This is not a good idea because mixing expenses complicates matters when you do your taxes and when you’re going through accounting records. If you have an accountant and bookkeeper that handle your business’ financial affairs, be aware that you may get an earful when they see the unnecessary work you have given them. Budgeting is the best solution to maintaining separate expenses. By adhering to a budget, everything is organized so you’re able to produce the appropriate—as well as updated—documents when you need them. And as a bonus, your employees will be happy.

Become a Green Business

Some states have made eco-friendliness a standard, including Florida where businesses can receive a sales tax exemption for using renewable energies. Not only does going green result in financial advantages for your business, it also makes a great story to share with your current and potential clients. Humans are more likely to act when they are presented with a story because they see that your business is not solely concerned with profits.

Grow Your Business with Greenbox Capital

At Greenbox Capital, we help small and mid-sized businesses across the United States, Puerto Rico, and Canada using over 30 years of combined experience and knowledge. We provide alternative funding options that allow for fast funding and approvals within three to five business hours. If your business has been operating for at least six months, contact us today to see if you qualify!