Coming up with a good financial strategy for your business to go by make take a lot of time and cause you to have to seek guidance from other individuals who know more about accounting and balancing business finances, explains Carlos Hank Rhon. But once you are able to come up with a solid financial strategy for your company to go by you will be a lot better off with a more solid cash flow situation and less liabilities to pay off.
A huge part of a successful business plan is the financial side of the plan. The financial strategy for your company should include the income statement, the cash flow statement and the balance sheet. For many new businesses that are just starting out, these financial statements will only be projections however existing businesses will be able to contribute several years of financial statements as well as projections for the future, notes Carlos Hank Rhon. Along with these statements the plan should also include the financial strategies for the business and how their finances will be taken care of over time.
Cash Flow Management is an important part of any financial strategy according to Carlos Hank Rhon. The income statement and balance sheet can look perfect on paper but if the cash flow is not managed properly then a business can go under very quickly. Managing your cash flow should be a huge part of your company’s financial strategy. This should help you to determine how your company’s profits will be used in order to create more revenue. It will also identify the amount of cash that will always be in reserves or on hand as well as how all major debts are expected to be paid over time. Cash flow management includes laying out the financial strategy ahead of time so that you will be able to make financial decisions for your company easier when it comes time to write out a check for a major debt or access a line of credit.
It is important that any purchases that are made through the company no matter how big or small they may be should be detailed in the guidelines of the business plan. This will help you to determine which purchases should be made with cash, a line of credit or with a company credit card. This type of financial strategy can also help you to outline taking advantage of terms for your suppliers. If your supplier offers you a 45 day payment term, then the business will wait until the end of that term to make a payment which will be better for your company’s cash flow overall.
Your company’s financial strategy should be a general guide for how you need to spend and save money as a business, explains Carlos Hank Rhon. While there are some specifics in the strategy that could be outlined, it can be difficult to account for every type of financial scenario that you may be faced with on down the road. A good financial strategy will provide you with a strong guideline to go by so that you can direct the staff of your business in going along with the positive financial aspects of the business world from having to pay for debts and purchases to making payroll and keeping up a consistent cash flow.
No comments:
Post a Comment