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Ten financial management golden rules that will help your company make more profit each month

by , 13 January 2015
Improving your company's financial management is the key to improving your profit margins. After all, if you can control your finances better, you can stop your company wasting valuable resources.

The problem is, most business owners don't understand what good financial management is all about. They end up making mistakes that cost them money instead of save it.

I don't want this to happen to you.

That's why I'm going to show you ten golden rules of financial management that will make your company more profitable every month...

Make more profit every month by following these ten golden rules

1.Recognise your company's needs
It's important to recognise what your company needs and what you want for it. For example, you might want to redo the interior for your office, but you need to buy more basic furniture for your new staff.
2.Run your company with the minimum
The aim of any business is to make a profit. To do this, you need to run you company using as little of the money you make as possible. This means costs like employee training weekends and expensive client lunches should go. Replace them with in-house training and office meetings instead.
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3.Create an emergency fund
When you're trying to make a profit, the last thing you want is to suddenly replace that burst pipe in your office. Put some money away every month to cover any expected expenses. Aim to save enough money to cover six months' worth of expenses.
4.Make a budget
Budgets are a key factor in managing your company's money. Draw up a list of your expenses and balance them with your income. The aim is to always have more income than expenses. Use this to control what you spend so you don't eat into your profit. Check out the Master Budget Series for templates for the ten most common business budget.
5.Reduce your expenses
Where ever possible, cut down on company expenses. For example, don't buy the most expensive type of coffee for your employees. Cutting down on simple costs like this will lead to a bigger profit margin every month.
6.Invest your money
If there's an investment that can help your company earn more money, go for it. For example, if there's a new app that will help your business, invest in its development.
7.Always pay off your debts as soon as possible
Don't let debts accumulate. You'll struggle to pay them off and it will eat into your profit. Pay back debts while they're still small and easy for you to manage.
8.Set goals for your company
Set an income target for your company for every month. These goals must focus on growing your profits every month.
9.Know when to spend
Saving is vital, but sometimes spending is too. For example, if you offer your employees a bonus of 50% of their salary if they achieve a certain target, it will motivate them to bring in more money for your company. Spending in this way can increase productivity and your profits.
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10.Be realistic
The most important rule when it comes to financial management is to be realistic about what you have and want you have to spend. Setting unrealistic profit targets will just demotivate your employees. While trying to cut every single cost simply isn't realistic.
It's easy to make more profit every month if you stick to good financial management practices. Stick to these ten golden rules and you'll do exactly that.

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