Businesses encompass any organization or venture engaged in commercial, industrial, or professional activities for profit – this can range from sole proprietorships to large international corporations.

Management of business finances includes setting financial goals, tracking expenses and keeping records. Informed investment decisions must also be made and risks reduced accordingly.

1. Keep track of your expenses

An essential first step to effective business finances management is keeping an accurate account of expenses. This may require distinguishing between personal and professional expenditure, using dedicated credit cards for business purchases and keeping accounting books up-to-date. Doing this helps identify unnecessary costs as well as potential tax write-offs.

An integral component of monitoring spending is keeping track of when bills are due, such as accounts payable, credit card payments and business loans. Failing to do this could result in late fees, higher interest rates and damaged relationships with lenders and vendors – to avoid this happening you should use either a spreadsheet or online software to manage your accounts.

Maintain a reasonable inventory level is of utmost importance in business. Too much stock could increase storage and shipping costs while too little could limit sales opportunities. Make sure that each item in your inventory has an accurate count, and only purchase additional products when absolutely necessary.

While tracking expenses, you should also keep a close watch on how much money your customers are sending in. Therefore, creating an accounts receivable summary can help your business track any monies it owes or customers past due payments who need to be pursued for payment in order to maintain healthy cash flows and ensure its continual operation.

2. Refinance your business loan

Refinancing your business loan can be an excellent way to reduce debt and improve interest rates. Refinancing involves applying for a new business loan with another lender to pay off existing business debt, with the aim of saving your company money while streamlining cash flow. Refinancing can be accomplished using banks, online lenders or SBA loans as funding options; depending on which one you select and your personal and business qualifications this could potentially qualify you for low-interest rates on refinancing loans.

Your loan refinancing timing can have a dramatic impact on how much money you save. For instance, it is usually easier to secure financing once your business has been operating for at least one year and two is even preferable. Over time, chances are good that its credit has improved as well, which could result in more favorable terms when applying for new business loans. Also keep in mind that existing loans often include prepayment penalties or fees that must be considered when refinancing debt.

Before searching for a refinancing loan for your business, it is crucial to define your goals and why you wish to reduce debt. When applying, provide details about the type of loan, balance, interest rate and monthly payments currently owed on any current loans to narrow down options and ensure you find one that meets all your needs.

When shopping for a business loan refinancing loan, use Nav’s free business financing marketplace to easily compare multiple lending offers based on your business qualification. Our process is quick, simple and completely free of charge so you can use it to monitor the health of your company as well as stay current with its credit score – fast funding so that your finance tips can start working for you sooner!

3. Keep a savings account

Establishing a savings account for your small business is one of the most essential tasks a founder or owner must undertake. Not only will it protect funds from mismanaging working capital and help prevent misspends, but its investments may even add value by producing interest. A good rule of thumb would be depositing at least 10% of monthly profits into such an account (though this figure will differ depending on its size and needs).

Savings Accounts Help Keep Unexpected Expenses at Bay Equipment breakdowns, unanticipated travel needs and natural disasters never strike at an inopportune moment – they are however critical expenses that could severely derail your business goals and slow its advancement. Experts generally suggest having at least six months’ operating expenses saved up in an emergency fund as protection against these unforeseen costs – it will enable your business to weather any challenges without running out of cash, which is one of the main causes for business failure.

Savings accounts also help give you greater control of your spending. With credit and debit cards, it can be easy to lose track of how much is spent; with a dedicated savings account that requires more effort accessing, however, curbing non-essential expenditures should become simpler.

Savings Accounts Can Enhance Your Reputation With Potential Lenders

Many lenders look at your savings account balance when considering whether to grant you a loan, since having a healthy balance in savings may indicate how well your business is doing and that they see you as an acceptable risk for them.

As well as acting as an emergency fund, business savings accounts can also serve as a convenient way of covering quarterly or annual tax payments and unexpected expenses. Doing this makes managing financial records simpler while helping reduce stress from unexpected costs. Keep in mind that certain banks offer high-interest savings accounts specifically designed to encourage entrepreneurs to put aside funds for such expenses.