Convergence of Innovation & Entrepreneurship

Managing Small Business Finances: What to Focus On

While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. The most important step for any business owner is to educate themselves. In addition, organization is a major component of sound money management. Don’t be afraid to consult a professional, but make sure you have a handle on the day-to-day management of your business’s finances, as well as a plan for the future. Accurate financial statements are the backbone of a business’s financial management. Utilizing dependable accounting software to maintain these statements is crucial.

Templates and resources for better financial management

This program offers funding opportunities in the federal innovation research and development arena. fair market value fmv definition Small businesses who qualify for this program work with nonprofit research institutions in the early and intermediate stages of starting up. Start by contacting a bank with which you have an existing relationship. Big-name banks, like Chase, Bank of America and Wells Fargo, all offer a variety of business financing options. Many business owners feel intimidated by the financials when writing their business plan.

1. But if your small business starts overshadowing your day job, talking to a CPA to make sure you’re on track is highly recommended.
2. CPAs don’t just file your taxes—they also can help you with financial planning, tax planning, lease negotiations, financial reporting, tax compliance, and treasury management.
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With positive cashflow, your business can promptly settle bills and handle unexpected financial obligations. Nav’s marketplace can match you to financing options based on your qualifications. Your business has to match the grant’s specific criteria, such as being a minority business owner. You then have to compete with other businesses that also meet the criteria, possibly showing a detailed business plan or presenting your business idea and goals. You won’t have to meet requirements for making enough revenue or staying in business for a set amount of time. You don’t even need to be registered as a business entity, although the application will ask you to define your business.

Start with a balance sheet

For equity crowdfunding, platforms like Republic, CircleUp and Fundable are all viable options. If you’re looking for angel investors, sites like Angel Capital Association and AngelList can connect you with accredited angel investors. For example, if your business has strong qualifications but prefers an expedited process, iBusiness Funding (formerly Funding Circle) is a great option for traditional term loans. For businesses that want a flexible line of credit, Bluevine, OnDeck and Fundbox each offer competitive products. It allows you to keep tabs on your company’s financial health and makes your CPA’s job easier come tax time. Basically, bookkeeping involves entering your sales and expenses into a spreadsheet and filing your receipts as a backup.

Business Line of Credit

In accrual accounting, sales, purchases, and expenses are recognized as soon as they’re billed. Fixed expenses are costs you reliably can expect to pay every month, and that don’t vary too much in price. This can include rent, business insurance, internet service, website hosting, phone bills, and software subscriptions. Platforms like Kickstarter, Indiegogo, and GoFundMe have grown in popularity in recent years.

Crowdfunding

At times, you might encounter phases of ‘negative cashflow.’ This could arise when making significant purchases like new equipment or encountering delayed payments from customers. During such instances, relying on a bank overdraft or a short-term loan might be necessary to cover the deficit in cashflow. Now that you understand a bit about what each financing type has to offer, what they might cost, and what will be required of you, you can go into the application process better prepared. This will help increase your chances of being approved for a small business loan. With the same benefits as an angel investor (including equity), these firms can take your business from idea to market in exchange for shared ownership.

But setting recurring time in your calendar to handle administrative tasks ensures you’ll have everything where it needs to be without causing yourself unnecessary stress. Set aside a couple of hours every Friday afternoon to do admin work. A CPA can look at your business plan and budget, help shed light on anything you might have missed, and get you set up with a bookkeeping process tailored to your industry.