Basics of Money Management

Money management is as important to a business as getting new customers. Of course, there is always to option of hiring an accountant or a bookkeeper but understanding money management for yourself is still very important. In this article we will treat some of the basics of money management.

First you need a commercial bank account. After you’ve registered your business, you can go to a small business-friendly bank and open an account. You will need some personal ID, your business name registration papers and license, and $100 for an initial deposit. If you have good credit, you can also ask for a credit line attached to your account which will have you covered during slower business days.

The next step is bookkeeping. You can do this on your own using accounting software such as Quicken and Quickbooks, but at the same time, this option is only viable starting off. You’re probably going to want to hire an accountant or a bookkeeper to handle this side of the business for you later on.

For your business to thrive (or to be viable in this day and age) you need to provide your customers with many ways to pay. Besides cash, you want to be able to accept credit cards, debit cards and electronic cash. Of course some of these payment options incur certain fees which will come out of your pocket. This is where you want to invest some time into finding banks that provide the lowest fees. Even a percent or two can make a difference on the bottom line, so finding a good bank is essential.

Credit cards and electronic cash are almost always used in online transactions, which, depending on your business, you will want to take advantage of. The ease with which a customer can buy something online makes them much more willing to spend, so opening a credit card merchant account is also important. This will incur some fees including an application fee, setup fee, statement fees and a 2-8% percent of the total sales value. There is also the cost of purchasing or renting processing equipment and software. And finally you have online payment services such as Paypal or Skrill. These services have very small fees and provide you access to millions of people that can make payments straight from their accounts with the click of a mouse.

Chris Benjamin, Rogue CFO

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