Starting your own business, like anything that’s worth doing, will take a lot of time and effort. At the beginning of your journey as a business owner, you’ll be wearing lots of hats, and one of those is your Finance hat. It may be overwhelming at first, but getting a good handle on your finances is key to growing your business. To help you get started, here are some financial tips worth trying:

1. Maintain good business credit

Having good business credit can be beneficial for your business in a number of ways. The most basic one is that a good credit score will mean you can qualify for loans or other financing options with better terms that you can use to make upgrades or adjustments that you need to further grow your business. Additionally, having good business credit means that you are on top of your business’s finances and can be a sign for vendors to do business with you even without down payments or with extended payment terms. But one of the most important benefits of maintaining good business credit is building the habit of good financial management: from efficiently managing cash flows to paying vendors on time. It’s essential to continually practice this at the onset, so you can continue to apply this habit as your business grows.

To start building your business credit, you should open up a business bank account. This way, your personal and business finances are kept separate. When your account is established enough to do so, it’s time to use your business credit card, but make sure to pay your credit bills in a timely manner. Your credit limit may start low, but it will increase when you start building your credit score. Another way to maintain good business credit is by making sure to pay your bills on time, or even better, early.

2. Improve your billing and collection strategy

Sure, your products may be flying off the shelves or you may have services scheduled for the whole month, but are clients paying you on time? A small business can be significantly affected even if only a fraction of your clients are consistently late with payments. Your daily cash flow can suffer if your unpaid invoices continue to add up. Here are some tips that can help you collect payments on time:

• Give great customer service: This may not be the first thing one thinks of when it comes to billing and collection, but it’s important to remember that your clients are human beings. Maintaining a good working relationship with them can be key to speeding things up or taking care of your invoice first before their other vendors’.
• Create written payment term agreements even before the sale or the start of the service: The payment terms and schedule should be agreed upon by both parties. This should include penalties for late payments.
• Offer a small discount for early payments: On the other hand, it’s also important to reward clients who are diligent with payments. Try to explore offering a 2-3% discount for early payments on a trial basis or as a limited time offer. Make sure to monitor its effectiveness and how it will affect your cash flow and bottom line.
•  Invoice on time: Your clients will only be able to pay you on time if they get their bill in a timely fashion. You can try to explore paperless billing; not only do clients get their invoices in real-time, but you also get to incorporate sustainability practices as well.
• Explore alternative payment channels: There may be clients who prefer to pay by check, while some may prefer wire transfer. Make sure that there are different options for your clients, so they can make payments more conveniently.

3. Monitor your financial books

Even if you have a bookkeeper on your staff, you should be able to keep track of your finances as a business owner. Knowing the progress of your business (assets, daily revenues, inventory levels, etc.) is important when running a business. When you regularly monitor your financial position, you’ll be able to see trends or gaps that need to be filled in your business. For example, inventory or stocks that are non-moving may become a liability in the future, so you need to map out marketing or sales strategies to increase offtake of these products.

4. Invest for future growth opportunities

As a small business, you may be able to keep up with the numbers manually, but it can be beneficial to already integrate your accounting software with your other third-party tools like ecommerce platforms or payroll management. This way, you already have the foundation of how these tools work together and are well-prepared to handle even more transactions as your business grows. Plus, your reports will be automated instead of manually computed.

In addition to app integration and automation that will allow you to speed up business workflow, make sure that part of your assets are reserved for other innovations that can help improve both your business operations and your workforce. Be on the lookout for new tech that’s relevant to your industry. Make sure to also invest in your most important asset: your employees. There may be seminars or training that can upgrade their skills, which can be beneficial not only for their personal growth but for the company’s success as well.

Partnered with great project management, consistent and diligent financial management will help you improve your business’ financial standing, allowing it to reach greater heights. Growth for your new business is right around the corner if you just continue holding on to your Finance hat