Managing your small business and its finances ensures long-term success. Unfortunately, this is often easier said than done. If you are starting a small business and want to learn how to manage your cash flow and revenue, you are in the right place.
Small businesses find managing payments and invoices a hassle, according to insights from PaymentsJournal. Recent survey findings showed that 64% of small businesses were unsatisfied with their payment offerings. Meanwhile, 56% of small business owners consider cash flow and invoice payment management an ongoing pain point.
Managing financial factors like cash flow and revenue can be overwhelming when you are just starting a small business. Fortunately, you can do so in many ways without having to expend time and resources that can be used on other aspects of your business. Below, we’ll be sharing some tips on how to manage your cash flow and revenue as a small business owner.
Also Read: Why You Should Shop at a Small Business
Using Revenue Recognition Software
Keeping track of your business revenue is essential for better cash flow management. Revenue tracking is essential for new small businesses to find their footing in the market. Nowadays, businesses can use enterprise revenue recognition software like SOFTRAX to enable back-office automation and keep track of business performance, including how much money is going in and out to keep the business running.
Platforms like these provide an automated, cloud-based solution that makes it easier for businesses to manage their finances without relying on overly complex spreadsheets or manually. This significantly reduces human errors and increases the agility of the business back office, allowing small business owners and teams to dedicate time and resources to other tasks and needs.
At the same time, revenue recognition software can serve functions beyond finances. They can also help businesses automate, comply with, and simplify the requirements for compliance guidance, ensuring that businesses can retain continuous accounting.
Automating or Scheduling Payments
Aside from using tools and software to keep track of cash flow, you can also use tools to help manage your small business’ cash flow more efficiently. Managing your payables can be overwhelming when you are just starting a small business. Still, many digital solutions available today can help you schedule your payments so you can better manage your business’s cash flow in case of an emergency. Automating and scheduling your payables can ensure your business gets everything it needs on time to continue running smoothly.
Of course, making your payments on time is only one step toward better cash flow management. Our previous post on “How to manage money in your own business” highlighted the importance of keeping all your paperwork in order. This includes ensuring you keep copies of all relevant and vital receipts for matters like taxes and other business expenses and any business cards and contact information. By keeping your finance-related paperwork organized, you can better monitor your cash flow and won’t have to deal with any surprises down the line.
Also Read: How to File Small Business Taxes
Cutting Unnecessary Expenses
Finally, it’s one thing to keep your finances in order. Still, applying your revenue and cash flow data into practical steps to benefit your small business is crucial — like understanding what unnecessary expenses your business may be making and minimizing them to ensure the business isn’t losing more than it’s making. A recent survey from the NFIB’s Research Center found that a third of small business owners seek financing to meet business expense needs like operations and inventory management and replace capital assets or make repairs. Meanwhile, 20% stated they needed further expenses to expand the business.
Starting A Small Business
Starting a small business may require a lot of expenses. However, by tracking your revenue and cash flow, you can better understand what needs changing within your business operations and what unnecessary expenses you can cut—whether an underperforming product or service or other operations that can be automated. If you need more help managing finances and tracking your expenses, use the Beem app. Save, spend, plan, and protect your finances better with Beem. Do more with Beem.
