By Satchit Hasabnis

Understanding the nitty-gritty of your business finances is the best way to manage cash-flow and credit. Every entrepreneur wishes to have enough monetary means to support and invest his/her venture and handle business debt expertly. Following cash flow management tactics will help you achieve this goal and stay on top of your finances.

Below given are ways you can manage and control credit for your business.

  1. Business Plan: You must draw concise financial projections, as much as possible. It will help you tap future opportunities and deal with hurdles, smartly.
  2. Expenses: It is necessary to review your costs. If you are expending more than what you had planned for, reviewing will enable you to fine-tune the budgeting plan, and maintain transparency.
  3. Timely Invoicing: A lot of your expenses will be fulfilled with payments from clients. Thus, never go slack on invoicing. Have a set of payment terms in place so that you know when to expect the payment. You should send out invoices in a timely manner. Follow-up about the payments if needed.
  4. Accounts: Consult a professional accountant for company’s financial accounting purpose. You may even get accounting software installed in computer system for the task, if you are handling a small business. This step will allow you to know accurate details about costs and income.
  5. Prioritize Needs: There would be many costs to take care of and all of these may seem important. But, you may not be able to fulfil all at the moment. This is why; you should prioritize needs and maintain a timeline for credit and finances to fulfil each requirement.
  6. Pay Taxes on Time: It is very important to pay applicable taxes on time. Delaying or missing taxes will attract heavy penalty and may even call for legal action, which can stress your finances and credit. If you want to take a loan for business, it will not be possible to get one if you have not been uniform with tax payments.
  7. Amount of Personal Funds Utilized: Sometimes you may have to take support of personal funds to pay for business costs. If you choose that over a business loan, then you must account the fund as a liability (as it has been emptied from your personal account), and try to recover it from the business profits, by noting it as a cost.
  8. Allocate Earnings Wisely: The earnings must provide for future investments and fixed costs as well as counted as business profit, which you can utilize for yourself. The proportion of disposable income should not compromise the funds essential for the working of your business, and vice-versa.
  9. Safety Net: You should save a percent of business income as emergency fund for future use. This fund should not be touched until and unless an unexpected cause arises, for which no other funding method comes to a rescue. Building a safety net of funds will always act as a backup when you are in a financially-difficult position.
  10. Cut Costs Where Possible: When profits start increasing, you may want to relax a bit and expend on things, you do not have to. For instance, you may spend more on luxuries, travel, etc. It is not a sin to enjoy the returns of your effort, but always keep a check on the same and do away with expenses, you do not have to incur.
  11. Legal Services: Do not compromise on legal fees. Consult someone who knows the job like the back of his hand. Do not forget to explain your intentions and expectations to the lawyer and get a complete quote for his services, so that you know how much you have to expend on legal services.

The above-mentioned guide to managing business finances and credit will definitely help you sail through financial ups and downs. Keep a note of these and use it to prosper in your business endeavours.

Satchit Hasabnis is a Chartered Financial Analyst who has more than 10 years of experience in the finance industry.  He co-founded,, which provides quick and easy loans like Personal loans, Education Loan, Business Loans, and Gold Loans etc to people of different economic backgrounds.

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