Online business is growing rapidly in the new normal era, opening up opportunities for small and medium enterprises. To be successful, SMEs need digital financial management that is easy, flexible, can be for business and personal, at a low cost. How to manage the best cash flow for online businesses?
It cannot be denied that the new normal era has changed the way many people behave, including the way people interact and shop.
Online shopping in the community is increasing rapidly, making online business opportunities high in the new normal.
Small businesses have a great opportunity to enter online business, not only because of the wide opportunity, but also the relatively low barrier to entry online.
To grow an online business requires hard work and a qualified strategy, because it does not just switch from shop to online.
There is a lot of homework, homework, that business people have to prepare to be successful online.
One of the challenges for online businesses, especially MSMEs, is how to manage finances that are healthy and good.
In business, managing finances, managing cash flow, are important but often overlooked, especially in small and medium-sized businesses that still have limited ability to record transactions and are disciplined in managing money.
Many entrepreneurs are more interested in creating new ideas, expanding their business, rather than building solid business financial management, while business is not only about income and growth but also about spending and controlling money, in order to generate sustainable profit growth.
This paper wants to share how and strategies to manage business finances effectively, including using the right bank account to manage cash flow and make transactions easily and cheaply for SMEs.
Tips for Managing Small Business Finances
How to manage financial cash-flow so that it can run properly and healthily, especially for small and medium enterprises that have many challenges. There are several tips to consider.
1. Separate Personal and Business Finances
The challenge that often arises is the mixing of business and personal cash flows, especially for small MSME entrepreneurs.
This is because many small entrepreneurs still do everything themselves, they do not have people who specifically take care of business finances.
Thinking that the business is still small so there is no problem combining business money with personal money.
Due to the mixture of personal and business money, it is difficult for entrepreneurs to monitor the financial performance of their business accurately. You cannot know which expenses are due to business needs, which are for personal consumption.
As a result, personal needs will gradually eat away at business funds, without being detected quickly, and only discovered after the money runs out and is unable to expand the business.
Therefore, the most important thing is that personal accounts must be made separate from business accounts.
Need to find a bank account that helps with this.
2. Pay attention to cash flow
Cash is King!
This is an expression to show how important cash flow is in a business.
A healthy, growing business has positive cash flow. Bringing cash inflow is greater than cash outflow.
With positive cash flow means that the business is successfully growing and does not always need an injection of funds.
If the cash flow is negative, it means that the business will ask for an injection of capital and at one point the development of its business will not be sustainable.
Is it okay to have negative cash flow?
It’s okay, but the business must have a plan when the cash flow will be positive and if it can’t be positive what to do to turn it into positive cash flow.
3. Create Routine Financial Reports
Founders or business owners have big visions and dreams, which is good, because it becomes the drive for the company to grow and develop.
However, because the vision is so strong, it is not uncommon for founders not to see the reality of the fact that, for example, businesses are always losing money, bleeding financially, without a clear plan when it will turnaround.
Well, the function of financial reports is to routinely convey the company’s financial condition objectively.
The key word is objective.
Numbers or numbers are objective and financial reports portray the condition of the company objectively, especially questions:
- How much is the income and expenses each month, as well as the details
- The assets and liabilities that the company currently owns
- Cash flow every month whether positive or negative.
The financial statements will show whether the business is making a profit or loss, and the figures are indisputable, providing a clear diagnosis of the condition of the business and the steps that need to be taken based on the figures in the financial statements.
4. Capital Loans
When the business starts running, players need to think about how to be able to maintain momentum and continue to grow.
There is a need for capital to develop a business and one of the sources of capital is loans.
Quick and easy access to loans is important.
Business loans are offered in the market ranging from banks, financial institutions, government KUR, cooperatives, revolving funds to online fintech loans.
Loans from each of these institutions have advantages and disadvantages. Choose the one that best suits our business needs.
Some things to consider when taking a loan:
- Calculate carefully how much money you need to borrow. The bigger the loan, the greater the interest costs that must be paid and will be a burden for the business, so you need to be careful in taking a loan.
- Learn about each finance institution about guarantees and interest. Do not let it be burdensome and actually hinder business development.
Bank Account for Business
Entrepreneurs need to have qualified financial tools that can help monitor transactions and manage cash flow easily.
A bank account that can provide various facilities to support business financial needs, namely:
- A business checking account with competitive interest rates and accessible for all transactions in 1 account, can be combined with a personal account so that it is more flexible to monitor.
- Internet banking with facilities for business because business needs are different from personal, such as deposits on deposits with attractive interest rates and flexibility in roll-over, and foreign exchange services, such as competitive exchange rates and serving multiple currencies
- Business loans with various variants that can meet various business needs and provide competitive loan interest
- Services for business transaction needs , such as payroll and payroll.
Not many banks specifically provide special account facilities for SMEs and are designed to meet the needs of small businesses.