3 Ways Entrepreneurs Can Manage Their Money Easier
A lot goes into running and growing a successful business. You’re probably busy finding clients, hiring a team, identifying new markets, etc. But as your attention is pulled in what seems like a million different directions, are you also making sure to keep an eye on your cash flow? After all, managing the money flowing in and out of a small business is critical to its long-term success.
“If a business owner doesn’t have the right practices or tools in place to help them manage their money, then they may run into cash flow issues that could hurt their business in the long run,” says Kaylyn Houston, Assistant Vice President. and consultant in high value-added business cards at American bank. “Many business owners are not experts in financial management; they are experts in the type of work they do in their business.”
This leads to common and avoidable financial mistakes. The biggest and most obvious mistake is not making sure your business is taking in more money than it is taking out. For many entrepreneurs, tracking how their money flows in and out of their business is unnatural. The next big mistake is waiting too long to apply for business credit, such as business loans, lines of credit, and credit cards. Business owners are often ambitious and very capable, but that doesn’t mean they never need a reserve of funds.
Here, Houston shares three important tips for entrepreneurs to more easily manage their money and thrive for long-term success.
1. Build a strong relationship with a bank that understands startups.
As you have probably already noticed, many banks look the same and offer the same types of products. Houston recommends finding a bank that has experts who can help you and explain things to you, not just sell you services.
“You need to be able to trust and trust the bank you’re going to bank with. You also need to be able to manage your accounts in one place,” says Houston. “It saves you time and gives you access to your business information so you can keep tabs on what’s coming in and going out of your accounts.”
To get started, contact your local bank branch and ask to meet with their investment banker. They can guide you through the first steps of your relationship and help you with online tools so you can access your online accounts and information. For example, entrepreneurs can exploit American Banking Business Essentials portal to online services, such as business deposit accounts and online banking/cash management tools, which are designed specifically to help them run their business effectively and efficiently.
“US Bank is a relationship bank,” says Houston. “It’s important to us that a business owner trusts US Bank to provide solutions to their financial needs.”
2. Receive payments and make payments in a timely manner.
It sounds obvious, but business owners absolutely need to get paid as soon as possible in order to run their business effectively. “If there’s a delay in paying for the product or service you’re offering, it could cost you and your business time and money,” Houston says.
To get started, meet with an investment banker and payment solutions representative who can help you determine which merchant processing option is best for you and your business.
A business credit card can be a great asset when making payments. “A meeting with an investment banker and a credit card representative will help you learn more about how you can use business credit cards to your advantage,” says Houston. “They can show you how credit cards can address your priorities such as creating more purchasing power, maximizing rewards, simplifying expense reporting, and determining which card is best for you.”
“Using a business credit card not only helps your business establish credit, but it can also extend your cash flow cycle,” Houston says. “For example, if you pay a supplier with a credit card, they get paid immediately, so there may be a discount for paying the bill in full immediately. Additionally, you’ll have at least 30 days to pay that charge on Finally, you can earn cash rewards on those purchases to earn cash back on purchases you already need to make to run your business and increase your bottom line.
3. Set up loans or lines of credit for overall growth.
You may have a plan to take your business to the next level, but you don’t have the cash to make it happen right away. Instead of waiting for your savings to accumulate, consider getting a business loan or line of credit to help grow the business.
“Loans can help you upgrade to bigger/better equipment so you can give your customers what they need,” Houston says. “A business line of credit can be useful for short-term expenses that shouldn’t be put on a credit card. Lines of credit can also be in place for any cash flow discrepancies you might experience.”
Working with your investment banker is the best way to determine if a loan or line of credit should be established for your business.
Click here to learn more about how US Bank’s team of experienced financial experts can help you manage your money and succeed.
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