Money is not an end but a means. The common trait of successful people is not living to make and grow money. In fact, these people could keep doing what they love to do if they get more or less money.
That’s why I wanted to write this article where I’ll try to explain why finances are so important for all kinds of businesses and what tool can help you to control them better. At the end of the day money is the means of life and to get it your best weapon is your business.
Related article: The Why of Money: 3 Essential Tips
What is financing for all types of businesses?
It can be said to be the science or art of managing money. Accounting is about the acquisition and use of money.
Finance for all businesses seeks the balance between:
Finance for All Business also tries to answer the question:
How is the company in a certain period of time?
And with the help of accounting, with the help of the following degrees:
- Balance Sheet: shows a company’s equity in assets, liabilities and equity.
- Profit and Loss Account: is the result of a company’s operations.
Why is finance important in a company?
Today we are confronted with many uncertainties: pension, interest, debt, credit, business growth.
Therefore, financial management becomes more important in any type of business, to be able to face these uncertainties and define goals to subvert them, such as:
- An accounting analysis of balance sheets and profit and loss accounts
It is important to know if you are in debt, if you have sufficient working capital in terms of inventory and customers in order to know how to improve your inventory and thus have a solvent balance sheet.
Understand a profit and loss statement correctly to see where there is room for improvement and to be able to make decisions in the company according to the different levels.
- financial planning
Can you afford more debt? Can you invest more in your business? Projecting your company’s balance sheets, income statements and treasury can help you determine your company’s needs and what the ideal products are to meet them (whether it’s equity, short-term or long-term debt) and how it affects your business.
- investment selection
Do you know which is the best investment? Do you know where to start? In a few words “Where do I invest and how do I finance myself?” And to do this you also have to determine whether you create value for your company with the investments or not.
- How can I rate my company?
This is a fundamental consideration as it will help you decide whether to sell your business, merge with other businesses, etc.
[Tweet “Las #finanzas no son un fin, son un medio”]
So… until money do us part?
Learning to control our company’s money not only directly affects our bank account, but also has a sensitive impact on future opportunities.
Related article: 7 mistakes we make with money
And what does a CRM do for your company’s money?
CRM is a useful tool for all types of businesses, from the smallest to the largest. This tool tries to create a philosophy of monitoring and controlling your customers and your sales team. This type of “corporate culture” will not only make your company a better company, but it will also improve your marketing strategy, customer service, and better use of your money.
“29% of sales leaders are satisfied with implementing a CRM, @forrester”
What is financial culture or financial education?
It is nothing but the ability to understand how money works in the world, how much money you have, what you spend it on and how to get more of it.
In Spain it is National Stock Exchange Commission (CNMV) and the Bank of Spain have a financial education plan for 2013-2017 to teach citizens how to better manage their money and so on can be downloaded here.
I discovered a program in Peruvian called “To take off the hat TV’ in which they will talk to you about entrepreneurship finance and small business examples in Peru. I recommend it to you!
I hope you enjoyed it… Now if you need more information about finance for your business, I recommend:
More articles on finance for all types of businesses:
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