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Some Money Management Mistakes and Remedies

May 31, 2018 by OSYB Staff

Intuit QuickBooks shares 13 common money management mistakes that small business owners make coupled with some possible solutions, here are a few common mistakes to avoid:

1.  Mistake:  Overspending in the early stages

Solution:  Start small and invest only when necessary and sustainable.

2.  Mistake:  Inability to manage cash flow

Solution:  Scrutinize your cash flow regularly by monitoring accounts payable and receivables, stay abreast with your clients,  and immediately cut costs where you can.

3.  Mistake:  Commingling personal and business finances

Solution:  Avoid at all costs and keep them separate.

4.  Mistake:  Not understanding the difference between the cash and profit

Solution:   Know that cash is the money your business can access at any time due to sales and expenses while profit is what you have left after covering all your expenses.

5.  Mistake:  Operating without a budget

Solution:  Create a budget.  Ensure that you keep track of every dollar spent and every dollar gained.  A budget will help you to control your expenses and define where your profits are made.  You should set aside money to pay your taxes.

6.  Mistake:  Not saving for a “rainy day” fund

Solution:  Part of your business plan should include building a “rainy day” fund to pay for emergent situations and for business security.

For more details:  13 Money Management Mistakes Small Business Owners Make

Image Credit:  Deposit Photos

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