Financial management is one of the most important activities in a business. Good financial management allows companies to plan their business optimally. Without them, the company’s business plan could collapse. No wonder the company has its own finance division. Financial management is the activity of planning, managing, storing, and controlling funds and assets owned by a company. The person in charge of this activity can be called a financial manager. Companies that are able to manage their finances well will also be able to run their business according to plan.

The purpose of financial management for a company is to improve capital efficiency, maintain cash flow, pay regular debts, optimize profits, regulate capital structure and oversee finances. In addition to the objectives mentioned above, financial management also has a function that can be a structured guide for companies in managing their finances. These functions such as planning, allocating, controlling, checking and reporting company funds.

In managing company finances, we must also have guidelines or principles so that management runs cleanly and well. These principles include consistency, accountability, transparency, management, accounting standards and integrity. If we are able to hold and implement these principles, we can be sure that the company’s finances will be well maintained and managed.

In addition to carrying out the principles of correct financial management, Most business owners have problems managing business finances properly so they often don’t know the financial condition of their business. Managing business finances appropriately and effectively is the key to keeping the company’s flow of funds from leaking which leads to financial losses. Here’s how to manage finances well :

1. Make an Annual Evaluation,

By making an annual evaluation, we can see whether the steps we used in the past one year period were correct or not. That way you can take corrective steps or continue the way that has been done in the previous period.

2. Determine the Term,

Determining the time period is the main thing in order to be able to control finances within a specified time, such as daily, weekly, monthly, or quarterly expenses.

3. Make an Income Plan,

The income target of a company also needs to be planned so as not to cause losses. Don’t forget to develop a marketing strategy in order to attract investors or consumers to be able to achieve the target according to the plan.

4. Separate between Personal Assets and Company Assets,

The thing that often makes business people fail is to consider the money from the business/company as their personal money. This perception is certainly wrong, because the company’s money is different from personal money. For that, you need to keep company and personal money, or you can start by creating two different accounts.

5. Manage Cash Turnover Effectively,

In managing finances, make sure all records are matched with purchase notes or proof of expenses. After that, we also need to document the income. Then from this it can be used to make a balance sheet.

6. Control of Assets, Debt and Capital Conditions,

We need to do regular checks to make sure everything is in good condition. That way we can ensure that the company can work well according to targets and plans.

7. Prioritize Company Needs,

As a business person, it is necessary to understand what is really needed in the company, and choose which needs are prioritized.

8. Setting aside income for business development

In addition to income for us or company employees, we also need a strategy in developing the company so that our business or business can develop better.

9. Setting Up an Emergency Fund

This Emergency Fund is to anticipate needs or needs that are important and urgent. With the Emergency Fund, we can use it to keep the company stable even in urgent conditions like this Pandemic.