How Your Business Can Overcome Financial Management Errors
Financial management is as critical to the health of your business as that original idea or execution on your product or service, but it may not be your top focus or an area you are excited to spend much time. That being said, financial management cannot be avoided. Keep your eye out for the following financial management errors to make sure you’re doing everything you can to do right by your business.
Inexperience or lack of knowledge in financial management
Again, you likely didn’t create a business because of your experience or passion for financial management, but you can’t let that inexperience be a detriment. There are plenty of tools out there to help give you a boost in financial management, such as outsourced accounting services, but you’ll need to dedicate at least some time to learn about financial management basics, so you know how to interpret the information once it comes your way. Don’t let your inexperience be your first financial management error.
Getting personal and business finances too intertwined
Another common financial management error the new and small business owner may fall into is conflating their personal and business finances. It’s important for you to have separate bank accounts and isolated accounting tracking for your personal and business funds. For tax and potential audit reasons, you’ll need to have your business account on its own; and for the sake of the financial state of your business, you’ll really want to make sure you know what money goes where.
Falling behind on reviewing financial statements
It doesn’t take long for a new and small business to get into trouble if the financial management tasks fall behind. You may only want to review your financial statements every month or few months, as it’s very time. However, putting this off is a classic financial management error, and you might not like what you see after avoiding the financial statements for too long. Be sure to check your financial health at least every few weeks, if not more, so you can see if trouble is brewing.
Undercharging for your services
In the midst of the blossom and growth of your company, you’ll need to do a fairly regular check on how your prices are working for you. Compare your prices to the market competition, compare them to your expenses, and make sure the time you and your employees are putting in is recorded. It may be tempting to keep prices low to gain more clients, but you may be doing yourself a disservice and putting your business’s financial health in peril despite the quality services you’re delivering.
Let Tobin & Collins find a solution that works with your business. We understand how to navigate the world of financial management for numerous industries. Contact us today to see how we can make things a little easier.