3 Top Tips for Managing Your Business Finances in 2023

Money management is always a critical element in running and growing your business, however current economic dynamics suggest an even shrewder approach to your business finances is likely warranted as we continue to move through the new year.

While inflation seems to be ebbing a bit and fuel costs have been plummeting for a few months now, the cost of goods and services in most sectors are still at an all-time high. Then there is that pesky interest rate that the Federal Reserve continues to hike in its attempt to curb jaw-dropping inflation. Borrowing costs are at a 15-year high and no rate reductions are expected until at least 2024.

This all means that money is more expensive and harder to come by, putting a damper on overall cash flow and business owners’ ability to invest in inventory, acquire more talent, and finance overall company growth.

Every business owner who weathered the pandemic storm understands what it means to tighten their metaphorical belt, so in all likelihood, navigating business finances in 2023 should be a manageable undertaking, as long as one takes a smart and metered approach.

Here are 3 Top Tips on Managing Your Business Finances in 2023:

1.     Maintain Financial Reports. Monitor the movement of your money. Every business owner should have a firm grasp on their Balance Sheet, Cash Flow Statement, and Profit and Loss Statement. Bob Haines, President of TAB Treasure Valley says that even business owners with a finance department should understand their financial reports well enough to be able to clearly explain them to a third party. Haines says, “The numbers tell a story, and often in that story are ways to save money or increase the ROI for the money that is spent.”

Read “Financial Documents Every Business Needs” at The Alternative Board.

2.     Improve Your Accounts Receivable Process. If your business is feeling the economic pinch, so are your customers. Facilitating customer payments is essential to staving off accounts receivable aging, so if possible provide customers with easy payment options. If you have customers who are struggling, consider creating reasonable payment plans spread over a defined period. Remember that goodwill is an essential element in Customer Loyalty.

Click here to learn more about how to improve your accounts receivable process.

3.     Create a Cash Flow Forecast. A cash flow forecast is an important finance tool that provides businesses with the visibility and control to make informed decisions. Creating a cash flow projection for 2023 will allow you to estimate the money you expect to stream into and out of your business over the course of the entire year. Cash flow fuels your business –  and business owners who pay close attention to it have an exponentially better grasp of future threats and opportunities. 

Free webinar: How To Take Control of Your Cash Flow with Forecasting.

No one can say for sure just how volatile 2023 will be for small businesses, but business owners who understand and embrace these simple finance best practices are much better situated in any economy.

Want to learn more about understanding the finances of your business? Contact me today!