As an entrepreneur, you are required to be smart in managing the finances of the company that you manage because finance determines the future of your company. Finances that are not managed properly can have a negative impact on the development of your company. Not necessarily companies, small and medium businesses also need good financial management. But, unfortunately, not all business people understand how to manage their finances. Therefore, you can use Xero bookkeeper eastern suburbs.
Some financial management mistakes that must be avoided by business actors:
Do not separate personal and business assets
This mistake is commonly made by small and medium entrepreneurs who are still beginners. When sales decline so they cannot cover expenses, they take their personal savings to cover it. As a result, personal assets are reduced. It’s best to set aside business profits for emergency costs so that they can be needed at this critical time. Conversely, excessive spending on business budgets for personal needs is also not justified. In the end, you will be confused about where your business is running and you cannot develop your business further.
Time is money
Embed this principle when managing your finances. For example when you need an additional loan to grow your business. If you borrow it from a bank, it takes about two months for the funds to be disbursed. Within two months, you should have been able to make more money than having to wait for the approval and the disbursement of loans from banks. Switch to another creditor who can give you a loan as fast as possible without a convoluted process. This is a form of time efficiency in managing finances. That way, you can immediately develop your products and services.
Borrowing More Money than Needed
You should not do this because you will need to pay more if you borrow more. Besides having to pay interest per month, the origination fee that you must pay is also greater. Origination fees are fees that are needed to process your loan which include preparing documents, verifying the borrower’s debt history, and so on. This origination fee is taken from the amount of your loan, usually at three to four percent so that the more you borrow, the more this origination fee will be.