5 Practical Financial Tips to Help Your Business Succeed
Proven Strategies for Smarter Business Management
If you want to gain an edge in managing your business, mastering these practical financial tips is a great place to start. These five simple rules will put you ahead of the vast majority of business managers and accountants, helping you win in your business operations.
1. Reconcile Your Bank Account More Often
You can’t reconcile your bank account “too often!”
Why this matters:
Reconciling your bank account isn’t just an end-of-the-month chore—it’s an essential practice to keep your accounting system accurate and up-to-date.
Best practices:
Daily reconciliations: The best bookkeepers reconcile their bank accounts to the online balance daily. This ensures real-time accuracy.
Weekly reconciliations: If daily reconciliation isn’t feasible, weekly works for many businesses.
Month-end reconciliations: Always reconcile to your bank statement at the end of the month to follow standard accounting best practices.
Benefits:
Keeps your cash balance current.
Prevents confusion about old transactions (“What was that charge three weeks ago?”).
Makes publishing financial statements at month-end quicker and easier.
2. Clean Up Rogue Transactions Monthly
Every business has them—those lingering transactions that don’t belong anywhere but keep appearing in your records:
Negative accounts receivable balances.
Uncleared checks from years ago.
Why this matters:
Messy books not only reflect poorly on your financial health but also make it harder to make informed decisions.
Pro tip:
Bookkeepers focus on getting 95% of transactions correct.
Controllers take it further, ensuring every transaction is in its rightful place.
Make it a habit to address and resolve rogue transactions at least once a month to keep your books clean and accurate.
3. Prioritize Payroll When Cash Is Tight
When resources are scarce, survival is key. Ensuring the continuity of your operations should always be your top priority.
Why payroll matters most:
Missing payroll can create a domino effect of problems:
Employees may leave.
Operations could grind to a halt.
The business risks closure.
What to do:
Analyze your cash flow carefully.
Prioritize payroll above other expenses.
Ensure your available cash covers upcoming payroll cycles.
4. Focus on Leading Indicators, Not Just Lagging Indicators
Good business managers know that relying on the current cash balance to evaluate financial health is risky. Instead, focus on leading indicators to predict future cash flow.
Examples of leading indicators:
The number of prospects in your sales pipeline.
The number of proposals or contracts issued.
The work completed but not yet invoiced.
Accounts receivable (invoiced work awaiting payment).
Why this matters:
By tracking these indicators, you can proactively make decisions to improve your financial position. Lagging indicators like the current cash balance only tell you where you’ve been—not where you’re going.
5. Show Trends in Financial Reports
Financial reports should provide context, not just numbers.
Why trends are essential:
A profit & loss (P&L) report or balance sheet with historical trends gives a complete picture of your business’s financial health. It helps:
Validate your expectations about performance.
Highlight surprising insights.
Action steps:
Always present financial reports with months as columns, showing trends over time.
Compare actual performance to your financial plan, budget, or forecast.
Example:
If your office supplies expense was $2,000 this month, ask:
What do we typically spend on this category?
Are we growing or shrinking in this area?
How does this align with our budget or expectations?
Providing historical context turns financial data into actionable insights.
Final Thoughts
Implementing these five financial tips will set your business up for long-term success. Whether it’s reconciling accounts more frequently, cleaning up rogue transactions, or focusing on leading indicators, small changes can make a big difference.
Ready to take control of your business finances? Start today and experience the benefits of proactive financial management.
Let us know how we can help—email us at Care@PrecisionF.com for tips and guidance!