Money Management from a Business Perspective

Good article from Kaz Domagalski. Visit articles base.com Administrating a business is very similar to organizing a home environment, with all the different expenses to consider preventing the business from going under with deficits and bankruptcy. A business has "children" in terms of all the employed operatives engaged hand-in-glove and with utmost efficiency to make sure that the business finances float above break even. There is however, one main focus for a business to thrive and exist in security and balance, and that is the knowledge of knowing how to manage money in your business, especially with overhead and operational expenses. Overhead And Operational Expenses Overhead and operational expenses are all billings, including phone, postage, insurance, vehicle expenses and all general outflow of financial allocation in order for a business to run competently. These include the wages and payroll system for all the employees, and staff who handles administrative jobs. Also in this respect are the different community utilities such as the water, electrical and gas services. Another consideration would be the internal service personnel costs such as the security, and janitorial services. Finally, all these are subjected to the different taxes incurred for the building, business, benefits of employees and other imposed expenses from the local government. Without appropriate and substantial external or personal funding for any of the areas mentioned, any business will surely have a hard time operating at maximum efficiency and would be in danger of consigning the whole venture to risk of either being overrun by competitors or be shadowed by loans and outstanding bills. Wages And The Payroll System Employees and administrative staff are dependent on the wages and salaries they pick up from the administration of a business. One should consider this as the lifeblood of any entrepreneurial endeavour. Too high an hourly rate in wage and one would expect a negative profit for the business. A small hourly rate would result in employee dissent and probable risk of key employees migrating to competitors who pay larger salaries The employee wage rate is equally as important as balancing the allowance of kids if compared to a home environment. Incorrect or ill-advised allocation of available funds, neglecting budgets, or over budgeting will affect other areas in the business that would have benefitted from appropriate financing. Utilities Public utilities are organizations that maintain the infrastructure for the public and business services. As such, they are subject to forms of public control and regulation ranging from community based groups to local government monopolies. The term ‘utilities' refers to services, both maintenance and administrative, provided by these organizations and consumed by the public and business. Natural gas, electricity generation, electricity retailing and tele-communications are key business elements which should be respected when critical budgeting decisions are projected. Internal Services Internal services which include janitorial and security services are equally important to businesses. As the company grows and becomes a more complex organization, larger buildings will require adequate facilities for an expanding workforce. These two services should not be neglected as their importance not just for physical security and hygiene but aesthetically reassuring from a visiting clients perspective. Furthermore, if the business is engaged in manufacture, warehousing or retail, a security service is essential to provide the sense of security to clients as they will be entrusting their hard earned cash and resources in exchange for services or goods that the business offers. Taxes Paying taxes on time is a major obstacle faced by companies, especially small, recently started businesses by the end of the financial calendar. Business taxes can be summarized simply by calculating your total revenue, reducing this amount by as many tax deductions that are currently available and then paying tax due on the remaining amount. Sounds easy! However, filling in lengthy forms and ticking respective boxes requires expertise to avoid errors and, before going any further, the first thing to consider which is crucially important at the end of a financial period is hiring a professional team of tax experts working for you. You may believe that you are able to do this work yourself, and maybe you can. But, consider money well spent on a team of professionals to help you do it better.