17

Ways of managing business finance

Any organization requires finances for its daily operations. Business finance is the amount of money that is owned by an organization. This finance does various functions in the business for example the general management of the business. Management of business finance has been a challenge to most managers or the owners of the organizations.

It requires knowledge from various disciplines such as accounting, financial management, financial mathematics and economics. Proper management of business finance is required to ensure the business generates the highest profit. For the successful management, an organization must have a recognized bank account particularly a commercial bank account. The bank account facilitates efficient and effective financial transactions of the business . Book keeping must be ensured.

Transactions that take place at any point in the business can be accounted for and be a reference point at some future date. These transactions include purchase, sales, payments and receipts by the organization. Book keeping has currently been made easier by use of book keeping software like quickbooks or quicken because they are simple, quicker and convenient to use Good management of business finances calls for establishment of payment terms. It is very important to establish clear written terms and conditions to clients before providing services or delivering services to them.

Payments terms and conditions must be elaborated on your estimate forms included in formal contacts, work orders and printed on your final invoices and your monthly account statements. Another way of managing business finance is through establishing a culture of securing deposits. Business transactions that involve orders or provision of services calls for prior deposit by the client before commencement of serving the client. In this case deposit should at least be of equal value of the service for example if you are supplying human resource, you need a prior deposit of at least a third of the total payment to be made. Progress payments is another way to avoid financial risks.

The secret to successfully securing a progress payments is to make initial agreement on the terms and conditions of the progress payment to ensures payment is done continually. Percentages are used for example 30 percent deposit, 25 percent upon delivery, 20 percent upon substantial completion and the remaining after some definite period of time.Other ways of managing business finance is establishment of a way of extending credit and and debt collection. In conclusion, management of business finance is the key to success of an organization hence one should take into consideration the above ways to have a thriving business.

bfcd1307f5a93134d4e9b3f6fa6ffdb5

How To Hire The Best Financial Consultant

Currently, more people are turning to entrepreneurship rather than employment. The economic environment is more favorable with benefits such as tax-free saving accounts being made available. However, many people fail to consider the possibility of negative financial outcomes, thus the need of financial consultants. A financial consultant advises clients on the best ways to save and invest their money. They shouldn’t be confused for brokers, who persuade clients to buy stocks and other products, rather than advise on the best way forward, financially.

So how do you choose the best financial consultant to hire? First, make sure that the prospective hire is a certified financial planner. This is because they have to earn their license by going through mandatory classes and tests about the specifics of personal finance. This credential assures you that you will get sound financial advice rather than assumptions based on a ‘gut feeling’. Your potential financial consultant should also be a fiduciary. This means that they have pledged to always act in their clients’ best interests. Before hiring a financial consultant, you should also make sure that you take a look at their pay structure.

Some financial consultants work on commission, others on a flat fee and others work hourly. Consultants who work on a commission are not very reliable because they may be biased about the direction that you should take, and may advise you to make moves that benefit them rather than you Those who work on a flat fee may be a better option. However, if they earn an annual fee from the assets that they mind for you, there is a possibility of them advising against liquidating your assets, even though it’s the best financial move for you to make at that time. Consultants who work on an hourly rate may be the best fit as they depend on your recommendation for their business to grow.

You should also consider your prospective hire’s background. It’s important to have a consultant who has had a background in finance and you should also inquire about any clients they may have worked for whose financial plans match yours. A background check will also confirm whether their credentials are current and if they have had problems with the law. A financial consultant is important because they offer an objective opinion about the state of your finances. Therefore, it’s important that you hire the best consultant for your financial needs.