Getting your business up and running with adequate finances is just the first step. After which comes the challenging part: holding your business on a solid financial footing. After all, a healthy financial foundation is vital for running and expanding your business successfully.
However, developing good financial habits for business doesn’t come easy to everyone. Not sure where to start? Here are a few tips to help keep your business economically stable.
1. Set up an emergency fund
Owning a business comes with its own set of challenges. Finances can become uncertain and applying for a loan can take time. This is where maintaining an emergency fund can come handy. Whether you are facing a cash crunch, have to deal with unexpected repairs, or need to pay a supplier urgently, it can help you cover all of it.
2. Monitor your expenses and books
Do you toss your receipts and invoices aside only to sort them through once a year? It’s time to let this habit go!
When it comes to your business finances, you must monitor your expenses. Whether you have bought supplies, paid a creditor, purchased goods, or have any other business expense, record it in your books immediately.
And don’t forget to review your books and accounts regularly. This will let you have a clear understanding of your finances. Not to mention, it will help you plan your business loan interest rates payments easily if you’re servicing a loan.
Additional Read – Five ways working capital can work for your business
3. Prioritise debt management
Whether your business is having rainy days or golden showers, always prioritise debt before new investments. So, you don’t disturb the business stabilitybeyond repair.
Make sure to budget and tide over all your monthly dues on time, from loan EMIs to pending payments to partners. Also, consider outgoing costs like facility rent, payroll, supplier invoices, etc. This will keep your business on course no matter what.
4. Strike a balance
Your business is a distinct entity from you. So, why not also keep your personal and business finances separate? Have a separate bank account for your business to ensure you save money for yourself too, and don’t spend it all on the business.
Start using a different credit card, write cheques, or withdraw funds for company expenses from your business bank account. This will help you draw a clear line and also keep track of the business expenditure.
5. Automate your payments
Do you have business loan EMIs to repay? Do you often forget to pay the utility bills for your office? Does your business involve making monthly payments to regular vendors? Automate it!
Late fees and delayed payments have no benefit for your business. Rather, they might incur an added expense. So, consider setting up automatic payments and reviewing them regularly to avoid missing out on any important ones.
Additional Read – Five Ways to Grow Your Business
The bottom line
Develop these good financial habits to ensure a smooth business run. And if you hit a financial roadblock, turn to Tata Capital for quick business financing.
Enjoy competitive interest rates, flexible payments, and easy loan approval. Use our business loan EMI calculator and plan a repayment tenure that suits your needs. Contact us today!