7 Financial Management Tips for SME Business

Small Enterprises (SME) Business, or also known as UKM (Usaha Kecil Menengah) is one of the most important aspects in Indonesian economic. SME allows every single Indonesian people to not only being as an office worker but also to create their own business. 

Not only has a prospective business for entrepreneurs, SME also offered the opportunities for new jobs for Indonesian people. Aside of that, SME also use natural resources since it usually produce unique and different product which cannot be offered by big companies. No wonder, SME is definitely prospective for Indonesian. 

However, managing SME may not as easy as it seems. SME only has such limited investment and the amount is not as huge as other stable big companies. Therefore, SME needs to be well-managed financially so that the business able to run smoothly. Here are some financial management tips for your SME business that you can apply..

Separate between your Business and Personal Account


Starting SME business means that you have to use your own money first. However, when your business has run for several months and you’re starting to gain some profits, you have to separate your business and personal account. Do not sums it up in one account only because that thing only makes you confused, and you can use your business money to buy your daily expenses which is totally wrong.

Determine the Budget at Beginning of Accountancy Period

Before starting SME business, you always have to create and arrange accountancy budget beforehand so that your business can run smoothly. You have to determine what kind of expenses and necessities that your business needs. Aside of that, determining your budget also offers you efficiency and clarity of the expenses that you’re about to spend.

Take Notes for Every Transaction


Income and expenditure will happen every day toward your SME business. This is totally normal thing since it’s the business process. However, make sure to always take notes for every financial transaction that happened in your business. Taking notes will allow you to do the bookkeeping correctly so that there’s no mistake that could happen. If you sense some suspicious transaction, you can take a look at your notes to minimize mistake during transaction process.

Set up Emergency Fund

Emergency fund is very important in your business just in case you need extra cash to pay for something. Having emergency fund allows you to have a stable financial condition if there are some problems in your financial matter. You also don’t need to use your personal savings if there are any problems inside your business.

Avoid Go in Debt if you cannot Handle It


Sometimes, you have to go in debt in order to develop your business. Financial institution usually will lean you some debt by determining the size of your SME business. You can use Danamon Solusi UKM as an option for your SME business so that you can get the best investment for your business. 

Financial institution may allow you to lean the debt according to your needs, but you have to think beforehand whether you’re going to be able to pay for it later on. If it’s too much or too big for the scale of your business, you better not go in debt since it will only make you suffer later on.

Set Up Production Cost Wisely

One of the most important aspect in your business is probably production cost since it’s literally the beginning of everything. However, there has been a lot of cases when SME business unable to manage the right production cost which will only affect them in the end. Make sure you don’t go overproduction or oversupply because this will only bring your business problems in the future. Therefore, you have to set up production cost wisely since you don’t have too much investment unlike other big companies.

Regular Monitoring and Evaluation


Last but not least, one of the most important thing that you can do for your SME business is by doing regular monitoring and evaluation, especially in the financial management aspect. Your business can’t run by itself, and of course you have to pay extra attention if you want a successful business. Make sure there are no suspicious transactions or even wrong transactions since it can directly affect your business. 

Those are some tips that can be applied to your SME business Make sure you do all the steps correctly so that you won’t face any problems later on and your business can run smoothly to give you profits