Your business finances are about more than just expenses and profits. In order to truly succeed as a business, you will need to leverage debt, investment and more to grow your influence and improve your overall financial wellness. The good news is that you do not need to manage your business finances alone; an expert can help you make the right choices for your unique situation. As you consider potential next steps for your company, keep the following strategies and tips in mind.
Use Loans-But Use Them Wisely
It can seem like common sense to avoid debt at all costs. After all, increasing your debt burden can make it difficult to secure some financial advantages later. Debt also adds to your monthly payments alongside other responsibilities, such as inventory.
However, loans and other forms of debt can be a powerful tool to boost your credit and give you the buying power you need to make substantive changes. If a loan would help you double your reach or boost your inventory, it may be worth considering.
Make Tax Payments Monthly
Monthly billing can lead to stress, especially when you see that so many account balances are still outstanding. However, what businesses struggle with more is their quarterly tax payments. Instead of facing a large bill every few months, break your average quarterly tax payment into month to month payments. This will reduce the overall burden of the amount owed, and tax payments become just another line item on your monthly roundup.
In addition, proving that you make consistent tax payments can be useful if a payment ever falls through; those who have a habit of making timely payments may find more sympathetic solutions from tax officials.
Track ROI Alongside Expenses
As a business, it can be tempting to only view the red on your balance sheet. If you’ve spent a lot of money this month on bills and expenses, you may not consider your return on investment. Be sure to measure not only your income but also how your investments are working for you. If one of your biggest expenses was a large piece of equipment, is it boosting your business enough that it’s paying for itself? If not, do you need it? Return on investment is a window into the wisdom of your buying choices, as well as the other financial areas in which you can improve.
Cultivate Good Habits Early
Managing business finances is part decision-making, part habit. If you start early on with disciplined spending, consistent debt payments and regular reviews of your payroll and books, you are cultivating good habits that will benefit you as your business grows. It can be more difficult to begin these processes later, when your financial materials are more expansive or disorganized.
Keep Your Credit Healthy
It is possible to make wise use of debt and also keep your credit aglow. Maintaining excellent business credit is important for future opportunities, qualifying you for loans and other options at more favorable rates. In order to achieve this good credit, be sure to make your debt payments on time.
If you do not have a business credit card, consider opening one, even if you do not plan on using it often. The length of your account history is one factor in your overall score. If you can put small purchases on your business card and pay them off in full each month, you can boost your business credit with minimal effort.
Invest for Financial Growth and Business Growth
Investment is a critical element of successful businesses. However, investment does not necessarily need to mean placing your money in the stock market. You have options to leverage your money for growth over time, ranging from CDs to mutual funds. Furthermore, consider making direct investments into your business itself. Could you expand your reach with a new location? Would more equipment help you maximize your profits? Do not be afraid to take some of your profits and funnel them back into the business if this would boost the success of your company.
Trust the Experts to Help You Manage Your Business’ Financial Aspects
Whether you are just getting started managing your business’ finances or you are growing and need some help along the way, you do not have to tackle this job alone. The experts at Inflection Advisors would be happy to learn more about your situation and offer personalized guidance to help you achieve your business’ financial goals. Reach out to learn more about our services or to get started with an appointment.
