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For Your Small Business Melissa Houston April 17, 2023

Top 6 Money Management Strategies for Business Owners

When you own your own business, managing your finances can feel challenging. From tracking expenses to investing in the right areas, there are many financial decisions to make. Some strategies can help you stay on top of your finances and make profitable business decisions. Knowing how to optimize profit will help keep more money in your pocket.

Here are some of the top money management strategies for business owners:

1. Track your expenses

Tracking your business expenses is essential for managing your finances. Not only do you need to track regular expenses like rent and utilities, but you also need to keep an eye on variable costs like marketing and advertising. Keeping detailed records of all incoming and outgoing funds will help you create a budget, assess any potential risks, and plan for future investments.

2. Automate your processes

Automating your financial processes will save you time and money in the long run by freeing up resources that can be better used elsewhere in the business. Consider using software solutions or hiring an accountant who can automate invoicing, payroll processing, tax preparation, and more tasks.

3. Negotiate prices

You can negotiate anything. Knowing how to negotiate prices when purchasing materials or services can keep costs low while meeting quality standards. Take advantage of discounts or offers when possible and be bold and ask for a lower price if it makes sense for both parties involved.

4. Monitor cash flow

Monitoring cash flow is one of the most important aspects of running a successful business. It will determine whether you have enough monthly funds to cover all expenses without accumulating debt or overdraft accounts. Make sure to regularly check bank statements so that you can identify any discrepancies early on and take corrective measures as needed.

5. Use tech tools

Technology has made it easier for businesses to manage their finances accurately and efficiently through automated systems that streamline bookkeeping processes such as invoicing customers or paying vendors electronically rather than with paper checks or cash payments, which often come with higher costs associated with them. Using these tools helps increase accuracy and reduces overhead costs significantly over time so businesses can maximize their profits even more effectively from day one.

6. Create a business financial plan

Having and following a business financial plan will help you manage your business finances profitably. A good plan should include short-term goals, such as tax savings and long-term goals, such as where you want to grow your business. Once this plan is implemented, business owners must monitor your results against that plan to ensure you're making wise decisions about your finances at every step.

The bottom line is that the success of your business depends mainly on your ability to manage business finances responsibly and strategically invest in areas that will yield maximum returns while minimizing risk levels. By following these six money management strategies, you will better understand where your money is going each month and the steps you can take to ensure your business remains profitable. With strategic planning, your business will have everything it needs to succeed and thrive.

Learn what Old National Bank can do to help your business grow. 

This article was written by Melissa Houston from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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