Learn the Numbers Game with These Simple Hacks

 

Do you find numbers confusing? In the hustle-bustle of life, the last thing anyone would want is to manage receipts and invoices. After all, managing money is nothing less than an uphill battle. You have to track income and monitor expenses to ensure the business doesn’t run out of budget. Likewise, you have to maintain enough cash in the emergency fund to keep the company afloat in tough times. Sounds a bit overwhelming, no? 

Life is much easier when you have brilliant financial and money-management skills. The way you spend money impacts your credit score, reflecting the amount of debt you can acquire. If you have been struggling with credit card bills, it will reflect negatively on your credit score. Similarly, improper fund allocation in the departments can adversely impact business efficiency. In short, mishandling the numbers can disrupt a business’s internal operations. 

However, working with numbers is not as arduous as people think. Besides standard addition and subtraction, you need financial know-how to tackle money-related matters smartly. Understand how to improve earning potential, handle debts, and manage business expenses. If you still encounter trouble working with numbers, have a look below. Here we are listing seven simple hacks to help you learn the numbers game. 

  • Purchase Smartly 

In today’s digital era, our impulsive buying behavior is costing us a lot. While individuals shop online, businesses are also purchasing innovative software and applications. Although high-tech tools can streamline efficiency, you must assess your company’s purchasing capacity. If you end up buying software from funds allocated for business expenses, it can create financial constraints. Hence, check cash availability, evaluate cost per usage, and make smart purchase decisions. 

Nevertheless, if you want to make substantial purchases such as machinery, vehicle, or equipment, plan for them. Delve into your company’s financials to ensure you have enough savings to fund a costly expense. In case you feel lost in all the numbers, don’t mind starting from the basics. You can enroll in short courses or opt for an MBA with accounting concentration online to become the master of numbers game. In addition to helping with business finances, it offers personal development opportunities, letting you emerge as a successful entrepreneur. 

  • Create A Financial Calendar

Business finance can be a bit tricky, primarily when you are overseeing everything single-handedly. You might forget to pay the quarterly taxes, pull credit reports, or schedule a meeting with a credit analyst. Well, before this forgetful behavior starts costing you money, consider setting reminders for essential money-to-do tasks. You can create a handy financial calendar and a budget for your business. It would include payment schedules, income inflows, and financial reports. You can also schedule financial meetings in this calendar to ensure all the documents you need are ready by that time. 

  • Use Cash 

Most entrepreneurs swipe their credit cards for every business expense. Indeed, it is a convenient payment mode, but it can have consequences in the long run. Any idea, what will happen if you are unable to pay your credit card bills? Alongside hefty penalties, you will have to pay a fixed interest rate settled by the bank. As a result, the business costs will increase by 10x, impacting profitability. To save yourself from drowning in debt, use cash for making payments. 

It will ensure you don’t spend more than you can afford. If the business doesn’t have sufficient cash, you will wait until debtors clear their payments. It is always better to delay purchases rather than risking your company’s finances. Once you stop incurring any debt payments, it can improve your credit score. However, you can use the credit card for emergencies but keep credit below 30% of your total limit. 

  • Track Expenses 

Whether you are running a giant organization or a small business, you have to incur countless expenses every day. If you can’t keep a track record of business spending, play detective with your finances. Pull out the credit card statements, utility bills, and ATM withdrawals to determine where the money is going. Similarly, check your company’s income statement to get a complete picture of spending habits. Look into expenses that are consuming the most significant percentage of profits and adopt strategies to cut back on them. If the utility expense is high, you can invest in solar panels or energy-efficient systems. 

  • Amp Up Earning Potential 

Every entrepreneur wants to grow and expand business operations, but it requires loads of money. It doesn’t matter whether you are thinking of diversifying the product line or launch something new – you have to raise additional capital. Therefore, explore ways to improve your earning potential. You can bring in a partner who will pool funds into the business. 

Otherwise, invest your savings into financial securities or the stock market. You can utilize the income from investments to fund new equipment or overseas expansion. Moreover, you can take advantage of free money. Perhaps, your bank might offer discounts on restaurants or gym subscriptions, helping you save up some cash. 

  • Prepare for Rainy Financial Days 

Are you optimistic about your business? It is always prudent to look at the brighter side of things. Still, you have to prepare yourself for unexpected situations. Sometimes, economic uncertainties and political tensions can adversely impact businesses. In these challenging times, you must have accessible liquid funds to keep the company afloat. Having money to deal with problems will make you feel secure and prepared. It would give you the confidence to deal with situations and pull out the business from the crisis. Hence, set some money aside from your profits for the emergency funds. 

  • Relook Your Debt 

Does your business have any pending debts or business loans? Unwillingly, many companies drown themselves in debt only to keep the operations running smoothly. There is nothing wrong with acquiring a business loan if you have a solid financial standing. After all, spending money on repayments and interest expense can dry up cashflows and business profits. Before the loans start consuming your business, find ways to keep debt at bay. 

If you have a mountain of debt, start by paying off smaller ones. It would improve your credit score while giving you the confidence to tackle larger ones. Similarly, you can look for debt consolidation or refinancing to secure a lower interest rate. It would help you pay back the loan quickly since interest expense won’t consume a massive chunk of profits. 

 

Final Word

The world’s leading financial expert, Dave Ramsey, believes – ‘you will either manage money or the lack of it will manage you.’ Therefore, every person must have a grip on how and where they are spending money. You have to maintain a budget, put money aside for emergencies, and stay away from debt. Managing numbers wisely can promise financial success, helping your business flourish.

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