Tips for Managing Business Finance with Apps for Operations to Run Effectively

Business and finance are two things that are closely related. When owning a business, ideally it should also be accompanied by good financial management.

Business financial management can make you more aware of financial conditions so that in the future challenges that may arise can be handled properly.

Problems in business may occur in the financial aspect, for that if you want to start a business well, learn as much as possible about basic business financial management.

Definition of Business Finance

Definition of Business Finance

In business financial management, there are various activities such as management, planning, depositing funds, and so on. Financial management can make business run smoother with a directed system.

For this reason, financial management cannot be arbitrary, you may need a financial management system using a financial planner or a company finance app that can help you.

The Importance of Managing Company Finances

Finance is an important thing in the company, because it is one of the strong foundations in moving and developing. Imagine if a financial administration business did not go well.

Instead of developing companies, the result is that employees’ salaries are not paid, unable to buy raw materials, or there are layoffs.

Neat financial management techniques are needed, truly trusted and responsible. The following is the scope of financial management and methods of managing finances for companies.

Scope of Financial Management

Broadly speaking, there are two approaches within the scope of this financial management. The conventional approach, the system applied in this approach revolves around money management.

Then there is the modern approach, this approach is broader in scope than the conventional approach. Financial management with a modern approach includes financial strategic decisions, investments and dividends.

Relates to the allocation of company funds, both income and expenses. In order to be efficient in order to get more profit, the scope of financial management can be drawn as follows.

1. Investment Decision

Investment decisions are closely related to assets. This includes buildings, land or where the company is located as well as the means of production. In addition, it can also be in the form of securities.

The investment decision is one of the important things because from there the company’s assets can become assets that have more value. Good investment funds will get long-term investment results for the company. Of course for the benefit of the company and the welfare of employees.

2. Funding Decision

Funding is generally related to where the company gets funds or capital, either from within or outside the company. Existing funds will be used for operational costs up to the expansion of subsidiaries. The policy here, of course, must be carefully considered for what it is allocated for.

Then to get new capital whether by debt or other means. This funding decision must be adjusted to the company’s ability, so that it does not cause harm in the future.

3. Asset Management

Another thing that is no less important in the company and cannot be ignored is asset management. Both visible assets and intangible assets related to human capital. Without mature policies related to assets, companies may not be strong in the financial sector.

Methods of Organizing Finances for Companies

The methods and functions of finance itself include several things, namely:

1. Neat Planning

Financial planning is the main pillar in managing finances. Having a good plan will minimize unnecessary expenses.

The company’s cash capability must really be known in detail, so that plans are made according to company needs. Neat planning, facilitate the company’s performance.

2. Financial Budget

From this good and neat planning, you can make a financial budget to suit your needs, efficiently and effectively. But before that, it must be checked first, what the company needs so that the budget is truly effective.

3. Financial Reports

Financial reports are very important so that plans and budgets issued are appropriate and do not deviate from the plan. To get big profits, financial reports must be made correctly and regularly.

From this financial report it can be seen the ups and downs of the flow of funds in the company. That way you can find the right solution to get the maximum benefit.

4. Reducing Risk

It is not easy to reduce this risk. Because good financial planning does not mean without risk. However, with clear and good arrangements, it will certainly minimize risks.

Sometimes, at the beginning of opening a business, you dare to take on large amounts of debt, not necessarily the results you expect.

This is a risk that inevitably occurs and must be faced. For example, by offering profitable business cooperation. Of course, with a clear agreement, so that profit sharing does not become an obstacle in the future.

Financial management within the company must consider all the risks that exist during the company’s operational activities

5. Financial Supervision and Audit

After all processes are carried out properly, then there is a need for regular financial supervision and audits. The benefit of this supervision and audit is to see whether it is in accordance with the procedures implemented by the company or not.

With supervision, something that looks deviated can be returned to the applicable regulations. You can also avoid fraud. Here you must know in advance about the differences between internal auditors and external auditors, up to the auditor’s duties.

With good financial management methods and strategies, the company will run according to the rules and according to expectations. Profits can be optimal and automatically employee welfare can be increased.

Advantages of Business Financial Management

If you have the ability in business financial management, then your financial condition can be controlled safely and comfortably. You can set your own spending limits that will not affect the company’s cash.

1. Maximizing the Use of Funds

Company activities with the use of funds can also be monitored properly. You can also use company or business funds more optimally, so that the funds spent can be more responsible.

2. Healthier Capital Structure

When you get or have business capital, you can also create a healthy capital structure. A healthy capital structure means that profits are greater than debt or debt does not interfere with the company’s cash.

3. Safer Investment

If your business is running smoothly and there is visible progress in a better direction, then the funds you have can be invested to get other benefits. This is certainly supported by good management.

Business Financial Management Objectives

There are several goals for good business financial management, including:

1. Maintaining Cash Flow

Entry and exit or cash flow in this company must be checked periodically. This aims to prevent unexpected expenses that result in losses to the company. For this reason, business cash is issued to purchase production raw materials, HR salary costs, company operational costs, etc.

2. Capital Efficiency

In every company there is usually a target to be achieved with capital that has been managed efficiently. Efficient business capital is capital that is quite a lot but used wisely so that business activities can run smoothly.

3. Optimize Company Wealth

If the company is big enough, then the company’s wealth must always be optimized, how do you do that? The trick is with good asset management, maximum profit sharing to shareholders will certainly improve company performance to shareholder confidence in your business.

4. Ensuring the Survival of the Company

Company decisions that intersect with business competition can affect company performance. For this reason, business financial management must be neatly arranged so that the company’s survival can continue to be stable.

5. Set the Capital Structure

Managing business finances is not easy, because income or capital must be used according to the budget of each need. This capital structure requires people who understand how to manage business finances.

After the capital is arranged systematically, then evaluate the results whether they are appropriate or not. So, it is very important to study business financial management.

How to Manage Business Finance?

Business finance can get better if you are able to manage expenses. Here are tips on how to manage business finances.

1. Record All Expenses

The first thing you have to do is record all expenses or transactions that occur in your business. By recording all expenses, you will know where your money is going. For that, try to make it a habit to record all the details or small things of your business transactions.

If necessary, keep all receipts showing any purchase transactions you made in connection with the business. In this way, slowly you will get used to managing business finances more regularly.

2. Create Financial Projections

What are financial projections? A financial projection is a plan or shadow in the future for expenses that might occur in your business. You can see future plans, for example in the next 1 month what you need. Try to check the stock of the items needed, are there any products that are reduced or stuck.

Financial projections are not only applied to production but also promotion. For example, if you need costs for promotions so you can make financial projections for the next few months.

3. Monitor Financial Cash Flow

The way to manage business finances that is often done by reliable businessmen is to monitor cash flow. A simple way to monitor cash flow is to keep money separate for business or personal use.

Generally, small and medium business actors often find situations like this where the money from the business is unknowingly taken for personal gain.

So, this can affect cash flow that might occur in your business. Cash flow must be closely monitored so that the time to distribute profits can be right.

For example, if you get a profit, then the money from the profit can be divided into operational costs, business emergency funds, etc.

4. Business Development with Profits

A sizable business profit is indeed very tempting to use immediately. However, keep in mind that you can turn the profits from this business back to make a profit.

You can use the profits for business capital again so that your MSME business can run smoother. Profits should not be used for personal gain, but save profits in advance to be used again if you need funds for production and promotion.

5. Discipline in Paying Bills

You have to pay bills on time in order to minimize the fine bills that might be obtained. Always record the bill payment date, make a checklist for bills that have been paid. If you have to pay your business money to pay a fine, just imagine how much revenue this penalty costs you withholds?

6. Look carefully when you open an offline store

If you plan to open an offline tofo as a form of business expansion, then you should consider it wisely. Generally, when opening a branch or offline shop, you need quite a lot of funds so that business financial control must be properly controlled. You certainly don’t want the offline store to close in the end because there are many obstacles that occur in the field?

7. Looking for Loans Can Be an Option

If you feel the need to make a business loan, why not try to consider a number of things. For example, Fintech for capital loans must be licensed by the OJK, capital loans have low interest rates, loans must also be trusted so that in the future you will not feel disadvantaged.

Some MSME businesses also make loans as venture capital. This is natural because in running a business, you definitely need large capital for a large business.

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