By Meghan Belnap

Finances are one of the most important things to watch when running a small business. Unexpected financial issues or poor money management are some of the leading causes of small business failure. While managing your business finances can be an incredibly complicated and intensive job, there are things you can do to make it easier and more effective. The following tips will help you protect your small business finances through the good and the bad so you will always come out on top.

Invest in expansion 

In a small business, it is critical to save money where you can, but it is also essential not to penny pinch where it counts. If you want your business to grow to a sustainable size, it’s important that you invest in quality equipment from the beginning. No matter your industry, putting in a little more so that you can get higher quality materials, equipment, and employees will save you costs in the long run and prepare your company for growth. Old or outdated equipment will make your company less appealing to customers, and underpaid employees are unlikely to refer people to work for you and more likely to look for employment elsewhere themselves. Putting down a little extra money at the beginning, therefore, will protect you against problems later on.

Outsource to professionals 

Finances are a numbers game, meaning that both income and expenses need to be carefully tracked so you will always have a strong idea of where your business stands financially. Small business owners can do this themselves, though it is often better to have a dedicated accountant. This can be an in-house employee or an outsourced one, but a professional managing your finances is almost always the best solution. Professional accountants or even financial lawyers can give you valuable financial advice that will save your company money and use the money you have more effectively.

Maintain liability insurance

Every company has insurance that is required for their particular industry. One piece of insurance you absolutely need, no matter what your industry, is liability insurance. When something goes wrong, whether it be injury, accounting mistakes, data security breaches, and so on, your company is opened up to expensive and lengthy lawsuits. You can’t afford to leave your company exposed to liability, so keeping all of your insurance, including liability insurance, up to date is essential to protecting your company finances.

Monitor your credit 

Just as with your personal credit, it is wise to monitor your business credit as well. The better your credit, the less in interest you will pay and the greater the likelihood you will be approved for loans. Consider getting a credit risk analysis, aiming for a 96% accurate bankruptcy risk score. When you know your credit, you can make better decisions for how to keep excellent ratings. You can also use that same sort of service to check out other companies so you know that a partner or key vendor is a safe bet for your company’s financial future.

Protecting your company’s finances should be one of your top priorities as a business owner. The best way to do this is by making investments and taking on services in the beginning that will help you monitor and protect your company going into the future. With some careful vigilance and sound business financial sense, you can protect your small business through both good and bad times.

_______

Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.