5 Ways to A Healthy Financial Position for Small and Medium Enterprises (SMEs)

5 Ways to A Healthy Financial Position for Small and Medium Enterprises (SMEs) – Financing is always a concern for businesses and at some point in time, you are most likely to apply for a business loan to finance your business development plans or to ease cash flow issues. When it comes to taking up a loan, you definitely want to have a healthy financial position to increase your likelihood of securing one. You do not want to be stuck in a situation where banks and financial institutions reject your loan application due to your poor financials.

Here are some tips on handling finances and managing your capital:

5 Ways to A Healthy Financial Position for Small and Medium Enterprises (SMEs)

Adopt accounting software for accuracy and digitize functions such as accounting, payroll and transactions. Invest in some accounting software or you can consider outsourcing to third parties to handle such functions. This can help you improve efficiency in your day-to-day operations. Record tracking is also done more seamlessly.

It is a healthy practice to keep these accounts separate. By doing so, you can clearly gauge how your company is performing financially. You can easily monitor the relevant transactions and it makes audit and tax calculations much easier.

Always keep your business expenses and revenues in check. It is crucial to watch the cash flows of your business. By digitizing and have separate bank accounts can help you better do the monitoring as well. Of course, you should diligently reconcile your bank statements to track your receivables and payables. Regular monitoring of your company’s financials allows a more accurate analysis of your business performance.

It is important for you to monitor and analyze the external business landscape as well. Economic, political and legal factors are crucial in determining the scale of your business activities and development plans.

5 Ways to A Healthy Financial Position for Small and Medium Enterprises (SMEs)

You do not need to graduate from a business school to make sense of your company’s financials. Of course, we are not talking about the complex financial algorithms here. Nonetheless, you need to understand your company’s balance sheet, income statement, cash flow statement and taxes. These are the key aspects you need to be aware of as they reveal if your company is in good financial health.

Do you know the difference between gross profit and net profit? Well, gross profit takes into account the cost of goods sold while net profit factors in the operating, interest and tax expenses on top of the cost of goods sold. Understanding common financial terms would be of great help in you trying to make sense of the financial statements and reports.

Are you aware that the operating cash flow is the amount of cash that a company has after taking into account the expenses, receivables and payables? That means if your net operating cash flow is lower than your profit after tax as reflected in your financial statements, you are spending more than what you earn!

There are so many components to managing a business and it can get pretty overwhelming. You can consider engaging third parties for their advice and services as well. With vast exposure to various industries and sectors, business advisors are experienced and specialized to offer you comprehensive solutions for your business.


Conclusively, capital and funds are the lifeline of a business. Especially when times are difficult, you don’t want to be frantically scurrying for funding. Effective working capital and cash flow management are very critical to any business therefore it is important to always be ready!

Should you encounter any financial difficulties in your business and require funding aid now, maintaining a healthy financial position might not be your top priority. You can turn to Avant Consulting – a professional loan brokerage firm to assist you in your business loan application. We seek the most competitive rates for you and maximize your chances of business loan approval. Wait no more if you require assistance in securing your loan!




Avant Consulting is a Singapore Corporate Loan Broker. Get your loans approved with our Singapore Loan Consultants today!


5 Ways to A Healthy Financial Position for Small and Medium Enterprises (SMEs)