At every level of business, from startup to maintaining one’s market share, assessing and reassessing business finances is paramount to continued success. It is a fact: it is not the products or the personnel that determine a business’ staying power. It is the financial management of a company that determines its present and future success.
Products and services have no value if the money their sales generate is not carefully accounted and reallocated. Spending money earned wisely and knowing when to save or invest in growth should be a business’ greatest focus. The number of businesses that fail during their first five years is very high, and is mostly due to poor financial management. Many textbooks highlight how most businesses that fail would have had much better outcomes had their owners made sound financial decisions in all aspects of the business.
Business Finance Fundamentals Ensure Business Success
Every business owner should know basic accounting principles, even if they hire an accounting firm to keep their books. This knowledge will benefit other aspects of running a business. For small businesses, there are numerous software programs that will not only educate business owners on business financing basics such as bookkeeping, but also the following:
- Day to day expense tracking: an owner needs to be able to create and analyze reports to know where their money is coming from and where it is being spent. The ability to generate reports and demonstrate fiscal responsibility is key.
- Accounts Receivable and Accounts Payable: An owner needs to be able to tell when payment is expected and to anticipate expenditures.
- Trending: will keep business owners aware of trends in their industry to plan accordingly. This can ensure small business survival in a turbulent marketplace or economy.
Another business finance basic is to establish a long-term financial relationship with a trusted financing source. Such an advisor will ensure that your business receives the guidance it needs to stay on course. Also when the need for additional working capital arises, you and your business have a track record of success and will have quicker access to necessary financing.
National Business Capital is a leading alternative financing company. We assist our clients to obtain the financing their business requires and forge long-term financing relationships to ensure their future working capital requirements can quickly be met. If you have questions regarding business finance, please call us at (888) 888-9124.