By Henry Brown

Most business is tight for those who are self-employed. You’re relying on other people to pay you on time, which puts your own scalability and growth on hold. This is especially the case if you have customers who refuse to pay you on time. Cash advances from credit cards used to be easy as an option for quick finance. As we’re now living in a more cautious financial climate, you need to be more careful than that to make it as a successful business. Those same cash advances were okay in a pinch but as a long-term finance method? Not a good idea. This means that you need to have a proper financial plan for those times where customers don’t (won’t) pay up. This allows you to stay away from being devastated as a business that cannot keep up with payments.

The issues you have financially with your business can be born from a lack of experience with business finance. Alternatively, they can come from a mess created by borrowing too much and being unable to balance the books on the way back. Most small business owners ask themselves what they could be doing to make business finance management much easier. Some people choose to go back to schools like the University of Southern California and start re-learning some of the critical aspects of business finance. Others want to bring on the expertise of a bookkeeper or an accountant who already understands funding for a business. Either way, something has to be done if you don’t know enough to keep your business financially solvent. Let’s take a look at some of the ways you can help yourself.

Reassess your budget

If you’re borrowing too much or spending too much, then there is clearly a budgeting issue going on. Managing costs is vital for your operation and its success, and you don’t want to mess up just because your budget is off-kilter. Profit and loss projection can help you, so start looking at learning about those before you do anything.

Understand your cash flow

Did you know that businesses mostly fail due to cash flow issues? One of your most important tasks is to identify the calculations of your cash flow as revenue and expenses are rarely consistent in a business that looks to grow. Everything from the season to inflation can affect your cash flow, and if you don’t understand it, you’re in trouble.

System improvements

If you don’t currently invest in good money management software, you’re a little behind the curve. The best thing that you can start doing right now is using good accounting software and manage your receivables and payables correctly. There are plenty of ways to do that without spending too much; it’s just a case of researching the best options for your business.

Finances are the one place in your business that you should understand as best you can. Without understanding those, you may lose your grip on your small business.

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Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.