The Do's and Don'ts of Managing Business Finances

December 11, 2023 | Posted in Bank Blogs

Running a business is never dull. There's always something to do – whether it's serving your customers, managing your employees, or troubleshooting technology. And that doesn't even take into account one of the biggest responsibilities and most important tasks for business owners – managing your finances.

To help simplify your financial duties, we’ve put together a list of these financial Do’s and Don’ts.

DO:

• Keep your business and personal income separate.
• Set and track a monthly budget.
• Monitor your monthly expenses.
• Stay on top of your cash flow using online and mobile banking.
• Set account alerts to help you monitor transaction activity and uncover fraud.
• Pay your bills on time.
• Invoice on time and work your receivables.
• Make saving money a monthly priority.
• Create cash reserves to help pay for unexpected expenses.
• Ensure you have a credit line or savings to manage seasonal cash flow.
• Use credit wisely.
• Know tax deadlines and set aside funds to help with tax payments.
• Capitalize on tax-saving opportunities, such as retirement plans.
• Maintain a good credit score.
• Put idle funds to work for you.
• Invest profits back into your business.
• Set financial goals for each year.
• Run financial statements periodically.
• Hire a professional accountant.

DON'T:

• Ignore your cash flow.
• Forget to pay yourself.
• Mix personal and business expenses.
• Ignore your accounts receivables.
• Borrow unnecessarily.
• Incur high-interest credit card debt.
• Pay suppliers late.
• Miss tax deadlines or not plan for taxes.
• Overspend on inventory.

Bottom line, doing the right things with your finances will pay off today – and for years to come.