You’re struggling to manage your business finances. How can you get back on track?

1 Review your budget

The first step to managing your business finances is to review your budget and see where your money is going and where you can save. A budget is a plan that shows your expected income and expenses for a given period, usually a month or a quarter. It helps you monitor your cash flow, allocate your resources, and set your financial goals. To review your budget, you need to track your income and expenses, categorize them, and compare them to your projections. You can use a spreadsheet, an app, or a business planning software to do this. Identify any gaps, overspending, or underperforming areas, and adjust your budget accordingly.

3 Increase your income

The third step to managing your business finances is to increase your income and grow your customer base. Income is the money you earn from selling your products or services, or from other sources such as investments, grants, or royalties. Increasing your income can help you boost your cash flow, invest in your business, and achieve your financial goals. To increase your income, you can raise your prices, expand your product or service range, diversify your income streams, upsell or cross-sell to your existing customers, attract new customers through marketing and referrals, and seek new opportunities or partnerships.

4 Manage your taxes

The fourth step to managing your business finances is to manage your taxes and comply with the law. Taxes are the fees you pay to the government for the privilege of doing business in a certain jurisdiction. They can include income tax, sales tax, payroll tax, and property tax. Managing your taxes can help you avoid penalties, fines, or audits, and save money on your tax bill. To manage your taxes, you need to keep accurate and organized records of your income and expenses, file and pay your taxes on time, claim all the deductions and credits you are eligible for, and consult a tax professional if you need help.

5 Monitor your credit

The fifth step to managing your business finances is to monitor your credit and maintain a good credit score. Credit is the ability to borrow money from lenders, such as banks, credit card companies, or investors. A credit score is a number that reflects your creditworthiness, based on your payment history, debt level, credit mix, and other factors. Monitoring your credit can help you access better financing options, lower interest rates, and more favorable terms. To monitor your credit, you need to check your credit report regularly, pay your bills on time, keep your debt-to-income ratio low, and dispute any errors or fraud.

6 Plan for the future

The sixth and final step to managing your business finances is to plan for the future and prepare for contingencies. Planning for the future means setting realistic and measurable financial goals, such as increasing your revenue, reducing your debt, or saving for a big purchase. Preparing for contingencies means creating a cushion of savings, insurance, or credit to deal with unexpected events, such as emergencies, disasters, or recessions. Planning for the future and preparing for contingencies can help you protect your business, adapt to changes, and seize opportunities.