Best Small Business Practices to Adopt in a New Financial Year

A small business owner is always striving to give his/her business the right environment to thrive. Here, environment implies having a good workplace, hiring efficient employees, getting the right equipment, developing fruitful relationships and most important of all, gaining access to proper financing and working capital. The last point is most important because every business needs money to operate and without a proper inflow and outflow of cash, any business will eventually suffer. Incidentally, inadequate access to working capital is the reason behind failure of most small business enterprises in the country and the world today.

In this post, we are sharing some tips that will help you enact financial discipline for your SME. To tip you off, these pointers explain the advantages of good accounting practices that keep your finances streamlined and readily available for use.

    1. Practice Strict Bookkeeping: The cardinal rule for running a successful business is to keep accurate records of all the transactions happening on a day-to-day basis. Financial records give you an accurate picture of your income and expenditure, debts, and, accounts receivables. Which in turn help you in tracking income, paying liabilities, and filing tax returns on time.

 

    1. Deploy Integrated Accounting Systems: The reach of technology is extending every day and a small business owner will do well to embrace a modern accounting system to integrate his/her small business with the digital economy. Accounting software are in use by most large scale businesses toady and their benefits are time tested. As a small business owner you can also utilise these systems to save accounting costs, improve financial accuracy, and reduce the chances of theft and fraud.

 

    1. Track your Invoices: Getting paid for the work you have done is all that matters at the end of each day as a small business owner. If you are not getting paid on time, your employees are not getting paid on time, your equipment is not being serviced on time, your rental and utility bills are not paid on time and so on and so forth. Therefore, it is important to have an active invoice tracking system in place. Moreover, generate your invoices as soon as your product or service is delivered instead of waiting till the end of month, this will speed up your invoice clearances significantly and give your working capital a boost.

 

    1. Follow Generally Accepted Accounting Principles: GAAP are accounting techniques that are pursued by leading accounting and auditing firms and are accepted as a standard procedure in the financial world. By following these principles on reporting and disclosure of financial statements you will not only be able to draw quicker financial decisions but will also instil confidence in a lender or investor for raising funds.

 

  1. Use Small Ticket Finance for Working Capital: As enumerated at the beginning of this post, having enough money to run daily business is one of the primary concerns of a small business owner. It is quite possible that your business will run into temporary working capital difficulties at the beginning. In such scenarios, never dip your hands into the capital earmarked for equipment or assets to use as working capital. This a vicious cycle which may never end and cause your business to lose precious competitive edge as you fail to invest in proper assets because you used up that capital as working capital. Instead, apply for a working capital loan to finance your short term needs. There are many fintech firms like Lendingkart who offer working capital loans at low interest rates in India. These business loans are short-term, typically one year in duration, and have flexible EMI options to make repayment easier.

In conclusion, financial discipline is necessary if you want your small business to be profitable. The online world offers a lot of tools that you can utilise to bring in transparency and accountability for your small business. Furthermore, online financing options have made it way easier to get working capital loans for a small business and you should utilise these opportunities pro-actively for sustained success in your venture.

To know how to apply for a small business loan from Lendingkart, click here.

Grow Your Business with Quick Small Business Loans

Every business follows a different approach towards loans and institutional finance. As an independent business owner you may or may not have borrowed money in the past to achieve your business goals. If you have not taken a business loan in the past, it is but natural to be a little averse to taking up a liability, however, sometimes a loan is a risk worth taking.

By utilising the loan funds for the right reasons, at the right time, you can give your business a veritable boost. Here are a few reasons for taking a business loan that you should consider

Expanding your facility or getting a second site: If your business has been growing year on year, expansion is a logical step to consider. You can utilise business loan funds for restructuring and expanding the original site or expand your venture to a second or even third site.
Improving your credit ranking: Borrowing loans and timely repaying them opens the path for larger institutional finance in the future. As good repayment record will have a positive effect on your credit rating, establishing you as a bona fide borrower. This in-turn will allow larger borrowings two or three years down the line, when your business needs another round of funding.
Buying specialised tools and equipment: If you already have ample space at the existing site, then you can also consider using the funds from your business loan for purchasing new stock or equipment. Sometimes using latest technology for production and management of your business can result in huge cost savings.
Taking advantage of a golden opportunity: Well a good opportunity seldom knocks twice, so if an amazing idea or opportunity comes your way which requires fast funds, a business loan can help you capitalise on it.
Hiring and talent acquisition: Every successful business needs talented hands and business owners agree unanimously on the fact that their people are the greatest business assets for them. So, don’t lose your best employees for the want of funds. Business loans also allow you to hire new talent and expand your enterprise.
Loans for working capital management: A business can still sustain itself in face of a temporary lack of profits but lack of working capital may force you to pull down the shutters. Cover the shortfall in your working capital with an unsecured business loan to get out of temporary sticky situations.

Where can you apply for unsecured small business loans?

Small businesses often turn to banks for unsecured business loans. But banks have a slow and bureaucratic system for application, verification and approval of small business loans. It may take as many as 20 days for a bank to process and approve your business loan application.

An alternative is provided by new lending products like Lendingkart for business loans in India. A business loan application with Lendingkart can get approved within 24 hours if all your documents and financial details are in order, giving you immediate access to the funds you need.

Furthermore, the application process is completely online which Lendingkart is able to save money on manual labour and in turn transfers the benefits to customers in the form of low interest rate on small business loans. As a borrower, it is a win-win for you.

The best thing about getting a business loan from Lendingkart

Lendingkart offers unsecured business loans.

When you take a loan from a bank, it is a secured business loan, which means you have to give the bank an asset of equal or more value as a collateral. In case you are unable to repay the loan timely, the bank can take over the asset and recover its costs.

An unsecured business loan doesn’t require any collateral, which is what Lendingkart offers. Thus, your capital is not at risk when you take a business loan from Lendingkart.

You can now apply for a business loan from the Lendingkart smartphone app. To know more and apply for Lendingkart business loans, click here.