Managing your business’ finances can make or break the business. A lot of people neglect and overlook these simple steps to stay ahead of the game.

Finance plays a significant role in one’s business. You can say that it is also one of the core elements of a company. When you start a business, you need sufficient capital to sustain your business, kickstart your production, hire employees, purchase supplies and to keep your business running. When a business’ finances are not managed correctly, the possibility of a business not surviving is very high. Therefore, it is vital as a business owner, to know how to manage one’s business and its accounts to stay running in the long-run.

Whether you are just starting out or are already in the business game for some time, these business’ finances tips and what not to do will help you. Here are the most common business’ finances mistakes that small business owners continually make:


  1. Not reviewing your accounts from time to time

This is one of the most common mistakes that most business owners make. They don’t make it a habit of examining their business accounts from time to time. When this happens, these business owners aren’t sure of their performance of the business. From the outlook, their business may look promising and steady, but little do they know that their accounts are already raising a lot of red flags.

accounts business
Business owners don’t make it a habit of examining their business accounts from time to time.

It is advisable to review your business accounts frequently, if not, quarterly. Doing this will give you a bigger picture of your business and inform you of its performance as well. This also allows you to be better-informed when you make business decisions as a business owner. You will be able to make the necessary adjustment when your business isn’t doing well or when your business is doing well. For example, if you are seeing that your business isn’t making profits as expected, you can start minimising costs in areas that aren’t contributing to the profitability of your business. By analysing and looking at your accounts, you can also avoid significant mishaps such as bankruptcy or being too deep in business debt.

For startups, it is recommended to have the business capital for at least three months for sustainability. You should be planning your business as if you were expecting not to receive any profit. By cultivating the habit of reviewing your accounts, you will be able to make changes according to the progress of your business. This will aid your business to be in operation for a long time.


  1. Not keeping track of your costs

This is another example of a common mistake a business owner tends to make. Most business owners do not list down everything that goes in and out, financially. They may have listed down the significant purchases on their business accounts and ignore the smaller bits, but unbeknown to them, the cumulation of the minor spending details may snowball into a considerable amount that may affect the business. Besides, without writing down everything, business owners won’t be able to tell that the smaller purchases made might be unnecessary and avoidable.

Business account
Most business owners do not list down everything that goes in and out, financially.

Listing down every purchase that comes in and out also helps business owners in keeping track of the business’ ROI (return on investment). Business owners would be able to tell which purchases contributed to the profitability of the company and which costs were not needed. They can also decide to increase costs on areas that contribute to the ROI of the business and decrease costs that didn’t. Overall, the account would be able to show business owners where to spend and where not to. With this, one would also easily be able to track the progress of the business and adjust according to the situation or trend.

Make it a point to write everything down in the business account, no matter how insignificant the purchase is. Business owners would also be able to track where the business capital went to.


  1. Not having a separate business account

A lot of first-time business owners mix their personal and business account. This messes things up terribly. With this, business owners won’t be able to differentiate or tell which spending is which and have a clear picture of what is happening in their business. This is both bad on the personal and business side of the business owner.

Therefore, it is best to have a separate account for the business apart from the personal account of the business owner. Business owners will be able to gauge the profitability of the business with the business account and also understand the ins and outs of the spending of the company. You can also easily differentiate capital set aside for the business and track from there.

A tip is to take 10% of the profit for yourself as a business owner first every month. Doing this doesn’t mean selfishly taking the earnings all for yourself, but helping to ensure a steady flow of income as well as to test the profitability of the business.


  1. Spending unnecessarily

The habit of spending unnecessarily for one’s business is common even among business owners. Business owners may pay on purchases that may not bring value or profit to the company. This is also a prone mistake for first-time business owners since the starting phase of a company most commonly won’t yield any gains yet, hence they would not be able to tell if their spending is impacting their ROI. Besides, they may think that most areas of the business need heavy spending in order to generate income.

One solution to counter this is by listing everything down in the business account. After that,  analysing it to see where the big chunk of the spending went and see if it helps in the business’ ROI. Business owners will then be able to determine which departments need more spending and which departments are not required as well as on where to cut costs. However, even a business should be minimising costs, but if it’s at the extent of affecting the profitability of the business, then the business owner should increase costs on areas that are bringing in profit. This is most applicable to companies that are bootstrapping.

Other tips include that if the business owner can handle specific departments, then he/she should do so. Besides, one should hire help or employees only when absolutely necessary.


  1. Not dealing with late payers

In business, late payments from customers and suppliers is a common occurrence and yet, unavoidable. This chain of events would then affect the cash flow of the business, hence leaving businesses to be in a state of mounting assets and liabilities. Most commonly, businesses solve this situation by getting a loan. True, a business loan can help to a certain extent, however, if the case goes out of hand, whereby the payments do not come in on time, and the matter drags on, a business can find themselves to be in a never-ending cycle of debt.

Late payment business
In business, late payments from customers and suppliers is a common occurrence and yet, unavoidable.

Nevertheless, what the business can do is to set early-on and specific payment guidelines to help minimise the damaging effects of the situation. One of them is to introduce penalties for late payment or late fees during prior agreement so that it keeps the other businesses, customers or suppliers in check.


  1. Waiting too late to get a business loan

Most business owners will think that the best period to get a loan, is when you need one. Wrong. The best period to get a business loan is when you do not need one and when the business is at its peak. Firstly, a business has a higher chance of securing a loan when their financial standings are good. Banks would require the latest bank account statements as well as the business’ accounts to verify profitability of the business. What better time to show this than when the business is booming. Secondly, a business loan would be useful for emergency situations such as a shortage of funds and to sustain during turbulent periods. You will never know when a business would have cash flow problems and a loan secured before that would come in handy in times like this. Think of a business loan as an emergency line of credit instead of a rescue plan.

You can get business loans from banks, though approval from them would be more stringent. Read here to find out what are the types of SMEs business loan available in Singapore. You can also get other business loan options from other financial institutes such as FS Bolt! FS Bolt is a mobile application where business owners can easily apply and get loans of up to SGD 50k within 24 hours! FS Bolt is also a product of Funding Societies, which is also certified by the Monetary Authority of Singapore (MAS). As compared to bank loans, there is no complicated paperwork involved with FS Bolt and business owners will get to know of the loan approval within 2 hours!


  1. Don’t have a contingency plan

Most business owners aren’t prepared if something terrible were to happen to their business. When disaster strikes and the business receives massive damage, most business owners do not know what to do. It is because of these trying times that most businesses do not survive. Besides most of the time, these businesses didn’t manage their finances well enough to pull through unexpected challenges.

One of the ways to counter this is always to have a backup plan and run a risk analysis. Have a contingency plan for when the financial part of the business underperforms, whether it is by getting a business loan, cutting costs, etc. As a business owner, you can also consider the impact of each business options and the preparation to deal with it. Strategise your contingency plan to minimise loss in business-critical areas.


Planning and managing one’s business’ finances can help you as a business owner, and make informed decisions that allow your business to operate without any unexpected financial surprises. It is also the key for a business to sustain through challenging times and survive long-term.

As most businesses need capital to survive, don’t wait until it is too late. Start applying to get a loan from FS Bolt. It is the easiest way to get a legit business loan of up to SG50k, which may also save your business one day.

Download the app here.



17 tips to manage your small business finances

13 Steps to Follow When Creating a Business Budget


Funding Societies Pte Ltd – Capital Markets Services License No: CMS100572-1 issued by Monetary Authority of Singapore (2016)

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