Small business financial management guidance: 12 tips for business owners

Business planning
Written By:
Arnie Campbell, SVP, Business Client Management Team Lead
Colleagues in discussion at a conference table

You’re in business because you’re good at what you do, yet there’s so much that needs your attention that it’s easy to hit cruise control on some of the basic elements of running a business. A good habit is to schedule regular "check-ups" by putting them on your calendar. This will help you keep an eye on the ongoing financial health of your business. To help, here’s a list of the basics to include in your review:

  • Find competitive savings rates for idle funds—Don’t let your money sit. Explore ways to maximize returns on surplus cash. You can use short-term Certificates of Deposit (CDs) to earn higher rates of return with the flexibility of short terms so you can access the funds if you need it.

  • Build a safety net or emergency fund—Borrow this best practice from your personal life. Set aside money for unexpected expenses or emergencies. If you already have one, revisit if it’s adequate for today’s economy. Learn why it’s a good idea and how to start a rainy day fund.

  • Develop a debt management strategy—Evaluate your outstanding debts and create a plan to pay them off strategically. Refinancing high-interest loans can reduce interest fees and free up cash. Try our debt consolidation calculator to help you save and pay off what you owe.

  • Track and update your budget—It’s important to regularly review and update your budget to ensure it’s aligned with your current financial goals. Keeping this top-of-mind is key to staying on track and identifying areas that need improvement.

  • Plan for taxes—Just as you’re an expert at what you do, we recommend working with a tax professional to optimize your tax strategy and ensure you’re taking advantage of all available deductions and credits. 

  • Leverage accounts payable and receivable terms to boost cash flow—Using vendor terms effectively can enhance short-term cash flow. You can also maximize your available cash by leveraging accounts receivable terms. Maybe use a line of credit to extend terms, keeping more money within the business for growth opportunities.

  • Utilize Treasury Management (TM) services—Assess the competitiveness of the services you use, including pricing. TM services help streamline processes, leverage your cash flow, save money and gain better insights into your day-to-day finances. Learn more about Treasury Management services

  • Optimize merchant card processing to save money—Assess your credit card processing services and fees. Decide what features are the most important for your business (fees, reliability, local support, free supplies, etc.) Be willing to shop for a new provider. You can contact one of our Merchant Services consultants to explore our services.

  • Evaluate your insurance coverage—Review your policies to ensure you have adequate coverage for today’s economy and are protected from all potential risks or liabilities.

  • Negotiate to save on expenses—When was the last time you explored discounts and deals with your suppliers and partners? If you’ve been a long-term and loyal customer it’s okay to ask. 

  • Monitor Key Performance Indicators (KPIs)—Don’t lose track of KPIs like revenue growth, profit margins and customer acquisition costs. Tracking these metrics help you make informed decisions about your business's financial health.

  • Diversify your revenue streams—Like they say, don’t put all your eggs in one basket. Explore opportunities to diversify your income sources to reduce reliance on a single revenue stream or relying on too few customers for the majority of your revenue.

Revisit this list often and make minor adjustments as needed, and remember to reach out to your support system. You don't have to navigate these decisions alone. I recommend speaking with a banker to explore your options and help tailor strategies to your unique needs. Staying informed, seeking guidance and adapting to changing financial landscapes are smart practices to help your business thrive.