Tips for Managing Financial MSMEs

Tips for Managing Financial MSMEs

Sometimes managing finances in a business is very frustrating. But this is important in business. Because the financial situation is a measure of whether your business profits or losses.

Finance is the heart of every business. Because every movement in the business is always viewed from a financial perspective. Financial Management will determine the future steps that must be taken by you as an entrepreneur. Therefore it is important to manage finances properly and correctly so that you can control your business finances. The following are some tips on managing finance in MSMEs.

"Finance is the heart of business"
Separating Private Money and Business Money
Most entrepreneurs often think that because their business is still small, it is no problem to mix their business money with personal money. This is a mistake that often occurs at the beginning of running a business. Those who often combine the money, often confused in determining which personal expenses and which expenses from the business. This even opens up opportunities for using business money to meet personal needs.

A simple example, for example if you want to save money in cash, then put it in a different envelope and separate from your personal money. If you save money in a bank, separate your business account from your personal account. Be assertive in carrying out the commitment in this separation.

"Separation of personal money and business money can prevent you from using business money for personal needs"
Budgeting Spending Wisely
Financial planning is crucial for business continuity. Without clear planning, you might not know how much money to spend. Even when you have more than enough capital, you must still make a budget plan so that expenditure can be well allocated. Budget planning that is not good and detailed, can make expenditures become larger and uncontrolled.

Avoid expenses that are not important to the progress of your business. Make a priority list of needs and budget in advance what determines the development of your business.

"Poor budget planning can make spending bigger and out of control"
Record All Financial Transactions
Most of the SMEs consider financial transaction recording as a hassle. They only rely on their memories for all financial transactions. However, running a business is not enough just to rely on memory alone. Detailed recording of financial transactions is very important to get an analysis of financial movements. That way, you will be able to see all transactions that have occurred. This will make it easier for you to track all movements of financial transactions in your business. This note can also be a reference if an error occurs in a transaction.

Prepare a special book to record every financial transaction that occurs in business. Record all transactions and financial flows that occur in the form to then be copied into the financial book. Don't forget to keep track of all the assets you have. But if possible, use a financial control system that can help you keep track of all the finances that occur in the business that you live.

"Keeping track of all transactions will allow you to analyze financial movements in your business"
Control Cash Flow
Don't focus too much on profits, but one of the important things you should pay attention to is cash flow. Debt, accounts receivable, and inventory you must calculate more carefully because all three must be balanced. For example, you have a business credit agreement. While you have outstanding receivables. Surely this will disrupt the continuity of your business.

Therefore, cash flow must be continuously controlled and monitored. Expenditures and income must be balanced with each other. When income starts decreasing means you have to reduce expenses. Manage stock of goods so that there is no build-up in the warehouse and remove old stock of goods by giving discounts thereby increasing cash flow.

"In running it is important to maintain cash flow stability for the smooth running of business processes"
Provide Reserve Funds
In running a business, sometimes an entrepreneur must have preparations for emergencies that come suddenly including financial matters. For example, when there are large amounts of receivables but are past due dates. Because the customer extends the due date due to administrative problems and at that time you need the disbursement of receivables in order to supply the goods from the vendor. Because of that problem, finally you have to delay to supply the goods. This will certainly disrupt your business turnover.

Another example is if you experience problems in shipping delays due to extreme weather or because of an accident that makes the goods damaged. These events certainly disrupt your cash flow.

But when you have a reserve fund, you can use it first so it doesn't interfere with other activities in your business.

Therefore, prepare funds to deal with emergencies by estimating the problems that you may face while running a business. After that, determine the amount of value of the reserve fund. This can reduce the impact of sudden problems.

"With a reserve fund, you can reduce the risk of problems that come suddenly"
Using ERP Systems to Manage Finances
A little mistake that you make can impact on the smoothness of the business you live. Moreover, calculating the amount of money is not small by only using a calculator, paper and pen. As humans, sometimes we make mistakes unconsciously, starting from wrong filling out forms, unclear writing, scattered or damaged paper.

Avoid this, try using applications that support finance and accounting such as ERP systems . This system can help to manage finances and accounting so you don't need to do manual methods such as calculating using a calculator and noting it in a piece of paper. All transactions are recorded automatically. Financial reports can be displayed anytime and anywhere.

"Using an application such as an ERP system can help record every transaction and provide real-time financial reports"
Managing finance is very important for your business. The more developed the business that you run, the more complicated it is to manage the finances of the business. Consider using a system that can record, analyze and manage finance and accounting.

Carve ERP provides all the needs in managing finances such as recording every financial transaction, displaying detailed reports, displaying cash flow statements, bank reconciliation, and integrating with the accounting department. In addition, Ukirama ERP also has features such as stock management, purchasing, sales, human resource management, manufacturing, repairs and accounting systems. Everything is integrated with one another.