The first quarter of 2014 has shown slow progress. Citing data from the Bureau of Economic Analysis, Forbes reported gross domestic product in the U.S. grew 0.1 percent. Meanwhile, a recent Moneris Spending Report showed similarly slow growth in Canada. While credit card spending increased 1.83 percent during the first quarter, debit card transactions dropped by 0.63 percent. Most business owners agree that the winter months caused downward pressure on spending, but the warmer months will likely mean a rise in consumer activity and spending.
Merchants know financial management will be key during the second half of 2014 because it leads to a sound and successful business. This means rethinking a lot of different aspects of the organization and deciding how to invest money in the coming months. There are many options, and companies need to make decisions that are best for their operations, customers and future. Understanding how the economy is improving, what the major areas of growth are and how special consumer habits will affect the business will help make better decisions about the future. Here are five helpful tips to improve financial management moving forward:
1. Plan out expenses ahead of time
Having a budget and sticking to it will be a major help for merchants trying to grow the organization while not overspending on unnecessary things. Working to maintain certain expenses while also investing in smart tools for the company will allow for success without risky purchases. The more merchants can save, the more chances they will have to invest in the right technology down the line.
2. Regularly check credit
Business credit is an important part of growing a company, and keeping an eye on it will give merchants a good idea of where they stand financially. Business credit will put merchants in good standing with other organizations in the industry as well, showing them that the brand is worth investing in.
3. Make sound purchases
The economy is slowly but surely recovering, but merchants still have to make smart financial decisions. Betting on a new purchase for the store or risking a significant sum of money on unnecessary objects will not be a smart move for the business. According to the article "14 Financial Resolutions For 2014" in Forbes, it's important to make sure all decisions are thought through and are not spontaneous. For instance, business owners should distinguish between items that can be leased or bought. Certain office items can be rented, which reduces the business owner's need to pay for maintenance but will likely require monthly payments, MLive explained.
4. Invest in the right technology
Payment processing solutions provide merchants with a variety if resources to integrate everything from mobile payment systems to interactive voice response for phone-based transactions. While staying on budget, it's important to use the right tools to ensure customer and employee satisfaction by making sure they're able to perform transactions without problems. At the same time, mobile apps and devices are important technological tools that will help make the business run smoother and more efficiently, especially when integrated with payment solutions.
5. Be prepared for emergencies
Having extra funds set aside should an emergency situation occur will allow merchants to handle the problem without diving too far into any other funds for the business. Risk management is a timeless aspect of running a business, meaning all merchants and small businesses should protect their assets appropriately for the coming year.
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