The ability to manage finances is very influential on MSMEs’ ability to advance and develop. Therefore, separating personal and business finances is very important for the sustainability of the business.
This was conveyed by Siti Muslihah, a lecturer from the Department of Economics and Business at the UGM Vocational College (SV UGM), at a training class entitled “Managing MSME Finances” at GIK UGM on Wednesday (Dec. 11).
Muslihah explained the financial management tips that MSME actors should follow: separating personal and business finances.
“This must be done. We need to open a special business account and track the transactions,” Muslihah emphasized.
However, preparing a budget is equally important. Muslihah explained the process of preparation, which starts with revenue analysis, cost identification, fund setting aside, budget allocations, and periodic monitoring and evaluation.
She also urged them to diligently record all types of transactions so that cash flow can be monitored, “If you diligently record all transactions, then it will be easier for us to see the profit and loss,” she explained.
Not stopping there, Muslihah suggested that MSME actors separate capital and profits. According to her, profits should be allocated for business capital investment, emergency funds, and personal interests.
This should be done to avoid the potential for MSMEs to be burdened with large debts or even bankruptcy.
“We must have savings from profits that can be used for operational expenses for at least 3 months. If you have to borrow, you can, but choose a low-interest one like KUR so that it is not burdensome,” she added.
In conclusion, Muslihah encouraged the participants to be closer to technology and utilize digital bookkeeping applications that are considered more practical.
In addition, she also encouraged optimizing digital sales through e-commerce, “If you encounter difficulties in your business, consulting with experts or learning digitalization from young people is a very good thing to do,” she concluded.
Author: Bolivia
Editor: Gusti Grehenson