How to Manage Money as a Tech Business Owner


When you own a small tech business, how you manage revenues and money will determine what profits you earn. Money management strategies can help simplify how to manage finances and reduce challenges.

A business owner mismanaging cash flow is setting themselves up for major problems further down the road. Furthermore, many ways exist to save, invest, and manage money to build wealth and support a positive long-term financial outlook.

Here is how to manage money as a business owner in the technology sector.

Consult an expert

There are many types of money experts, including financial advisors. business accountants, payroll specialists, and a family office. If you are managing money with a strategy you’re unsure about, don’t know where to take your money management, or need some advice, rely on an expert. It can be on an as-needed basis, or an office can be hired more regularly in an advisory capacity.

Evaluate your budget every month

At the end of every month, review your budget. Track expenses and revenues. See if there are any surprises with what’s coming in. Identify where there are opportunities to create more revenues and derive more money. It all starts here, and how you manage revenues and income will set up other money management strategies.

Save your money for a rainy day

This month may have been your best month yet! No growth is guaranteed to continue, however. Never spend everything you’ve made, even when you feel the expenses are justified. Always be smart with saving. Put away money in the bank.

Let it sit there as a protection measure to ensure that expenses are handled correctly and that your business remains operational when times are tight. Let this be the reserve you go to when there is an emergency expense as well.

Have a business financial plan

As a business owner, you probably want to fulfill short-term and long-term goals. Make a plan. Execute strategies. Monitor results to ensure you’re making the right decisions along the way.

A business financial plan can also assist you in confronting whether certain expenses are justifiable or not and how you wish to spend your earnings as they pertain to the business.

Carefully separate business and personal

It’s critical that a business owner keep business funds separate from personal funds. Mixing the two can result in disorganized record-keeping, missed growth opportunities, and misuse of funds, such as dipping into business funds to pay for personal expenses or even the other way around. Have separate accounts.

When you miss a deadline, you pay more

Never miss a deadline. When a bill is due, pay it. It shouldn’t matter if it’s accounts payable, a business loan, or a credit card. Make your minimum payments when you say you’re going to make them. This saves you late fees and added interest, avoids souring relationships, and protects your business credit. Track these deadlines and set reminders.

Take advantage of tax savings

Another strategy to protect your profitability as a business owner is to make sure you’re not overpaying in taxes. Pay less taxes and keep more of what you’ve earned. Look at tax opportunities by speaking with a business accountant and identifying strategies to spend intelligently without dramatically increasing what’s owed.

Track expenses and assess their value

Look at the money that’s going out. Rent and utilities cannot be traded in. Variable costs, however, can. Treat every expense like an investment. If it’s no longer yielding a return, cut it. Monitor spending and don’t overspend. Though it’s easy to use a business credit card, debit card, or cheque to cover small expenses, they add up quickly and won’t all be worth it.

Time your expenses correctly

When you spend your money is important. At times of low cash flow, you don’t want to make unnecessary purchases that can wait. Take advantage of discounts or offers, such as waiting until late-in-the-year Black Friday deals or negotiating a volume discount with a supplier. In terms of taxes, you may want to purchase items either this year or next to claim them accordingly and pay less in taxes.

Pursue payments and money owed to you

Accounts receivable are important. Don’t forget about the funds that are rightfully owed to your business. Created an accounts receivable summary book to track receivable totals.

Any past due dates can be identified and addressed. It’s smart money management to track these, send out invoices at the right time, issue late notices where appropriate, and ensure you are not leaving money owed to you behind.

Automate what you can or hire a financial manager

It’s easy to get caught up in managing money. There’s a lot of data to comb through. Automate data collecting and processing as best as possible, freeing up your time and resources to do other things.

Consider hiring a financial advisor, accountant, or a family office with experience in wealth management for business owners. This takes the pressure off you and can also be reassuring that an expert is guiding you.

Dean is a self-professed tech geek with a fondness for computers, video games, and any novelty tech-savvy gadgets.