A 10-Point Guide for Business Owners to manage their finances post-festive season

Each year, the country during the festive season is shrouded with laughter, togetherness, and celebration, which refreshes and enlightens the atmosphere. The season of the festival means the season of giving and spending. It is a must for business owners, especially start-ups and small ones, to understand that they should not have a big hole in their pocket to understand that post-festive seasons.

Here is a 10-point guide for business owners to manage their finances post-festive season.

1. Make a list of expenses and set a spending limit both for and post-festive season: A good way for business owners to manage finances after the festive season is to list out the budgeting and spending limit for the coming months. Assigns funds on each of categories of business spending, so that money is divided equally. You can take the help of online mobile budgeting applications by making a list of expenses and getting a tip to spend under the limit.

2. Prioritising spending is a must for small business owners: To spend under the limit specified, post-festive season, it is a must to prioritise areas where spending is necessary. You need to understand where everything is under budget, the business owners automatically can manage their finances well.

3. Keep track of spending: Cash in a business comes and goes very fluently. If there is a cash inflow, you earned income from telling products or services. When the cash goes out, it is expenditure related to celebrating the festive season, giving staff gifts, paying rent, wages, and loan repayments. Post festive season, it is a must to note each of the spendings that happens in a festive season. It is the best way of estimating spending capacity remaining post-festive season. It will be a great help of utilising the money-only business expenses that are high on priority.

4. Avoid borrowings: Even if you go out of budget spending during the festive season, never go for the borrowing option to manage your finances post-festive season. It is like falling into a debt trap. Try to spend as per the pocket. Take the option of debt financing only when there are no other alternatives. During the festive season, banks and financial institutions often come with an offer, but always think before applying for a loan. It is not wise to get a discount on future hard-earned earnings just for satisfying the temporary spending eagerness.

5. Maintenance of sufficient liquidity: Keep your spending funds for the festive season separately from maintaining the daily liquidity funds used for running smooth business operations. Following this, a business owner will face no issues in managing your business finances post-festive season. Even avoid touching emergency expenses also for paying off the festive expenses.

6. Keep in mind all the deadlines of the liabilities:  When you are planning your finances post-festive season, the most important thing is being aware of the deadlines of liabilities like account payable, credit card dues, payment of salaries. Set it on your priority list if you missed any of the payments that are due. You will end up paying a late fee or added interest charges.

Making payrolls after the festive season could be a challenge for small business owners. Try to optimize the payroll procedure for improvising the cash flow and making it a hassle-free salary payment. For managing the payrolls, you can take the help of the payroll software.

7. Focus on cost-cutting and increasing revenue post-festive season: After heavy spending on the festive season, a business owner is finding it challenging to manage the finances. They can consider decreasing expenses and increasing their income. Make strategies on cost-cutting for a few months. It will increase the revenue by way of product promotion, loyalty programs, offering discounts, and making business growth strategies.

8. Review of financial reports regularly: To manage the business expenses effectively, keep a close watch on the business expenditure. You can take the help of accounting software capable of generating an automatic profit and loss reports, balance sheets quarterly, receivables, and payable reports reflecting the true picture of a company’s income, expenditure, and profit and losses. It is the best way for business owners to get an insight into the financial health of the business owners to make effective selling, buying, and collecting strategies.

9. Send timely reminders for your payment and dues: To avoid payment delays after the festive season, make sure that all the invoices are being sent to the right place and at the right time. It helps in reducing payment delays. If you get all payments on time, it becomes easier to manage the business finances and smooth business operations.

10. Open a separate business current account: Be it a festive season or post-festive season, open a separate business account for not mixing personal expenses and business expenses. Even the sole traders are not legally mandated to create a business account. But in case the account is being opened, it becomes easier for them to manage the business expenses like withdrawal fees, introductory offers, transaction fees, and payment of wages to workers.

Bottom line

Sound financial management is key to running a successful business. Whether the business is big or small, Sound financial management is key to running a successful business. No matter if the business is big or small. If you are following the above tips, be it a festive season or post-festive season, it will leave no impact on business expenses. There will be no issues of negative cash flow. This guide to managing small businesses works well for all the business owners who are new and have less business experience.

If you are still in doubt or need to know more about managing business finances, contact OKCredit, it is one of the best apps to manage your hisab and kitab without any hassle.

Also Read:

1) Why You Should Have A Joint or Independent Account With Your Business Partner?
2) Things Business Owners Should Do If They Can’t Pay Credit Card Bills
3) How To Charge for Your Services if You Are an Event Planner?
4) How to Answer the Phone Professionally at your Business?

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FAQs

Q. Why is it essential to manage the business finances?

Ans. Sound financial management is key to the growth of any business. It is a skill in which every manager or small business owner has to become trained. Each decision taken by the business owner leaves a direct impact on the company’s growth. So, get a master's in all the tips to manage the business finances effectively.

Q. What are the best ways to track your business expenses?

Ans. Here are the most popular and common ways of tracking business expenses:

• Create a business bank account
• Select an appropriate accounting system
• Choose accrual or cash accounting
• Connect the financial institutions
• Properly managing the income receipts
• Keep a record of expenses using an expense app

Q. What is the most common form of business expenses?

Ans. Here is the most common form of business expenses:

• Loan repayments
• Commissions
• Payment of salaries
• Office supplies
• Postage and delivery
• Dues and subscriptions
• Contract labor
• Dues and subscriptions
• Office supplies
• Postage and delivery
• Printing and copying
• Travel
• Purchasing of software
• Utilities
• Setting up infrastructure

Q. Why is holding too much cash sound bad for the business growth?

Ans. If a business owner is holding too much cash in hand, it will result in lowering the capital cost, increase the risk of deteriorating business value, and chances of becoming management that is highly overconfident. It is the reason that decreasing and increasing cash flow counts as an indicator of good or bad times of any business whether it is small or big.

Q. How can one keep a tab on money movements when running a small business?

Ans. It is extremely important to track all the capital movements frequently. Proper evaluation of cash inflow and outflow helps in the determination of areas that are performing better. Online, there are many bookkeeping software available that will assist you well in designing financial dashboards to make the company’s financial progress easier. Try to manage the business finances by adopting advanced business solutions.