5 Strategies for Women to Manage Business Finances Confidently and Effectively

By Beth Melcher

The well-documented wage, lending, and funding gaps experienced by female entrepreneurs make an already difficult subject—business finances—even more tricky to navigate. Consider, for example, that according to survey findings from Intuit QuickBooks, during the COVID-19 pandemic women-owned businesses were more likely to report being rejected for loans or lines for credit, with a 16% rejection rate compared to a 11% rejection rate of small businesses overall. In addition, Facebook’s recent State of Small Business report shows that female-owned businesses were more likely to have closed during the pandemic compared to the global average.

Between unfair lending practices, unfamiliar jargon, lack of network resources, and many women’s preconceived belief from childhood that they “aren’t good at math,” it's no wonder that managing business finances can feel intimidating and daunting to female business owners—particularly those just starting out. As a bookkeeper, founder, and owner of my own small business, I can tell you that there’s nothing to be afraid of. You can do this!

I discussed this exact topic recently during a #SheMeansBusiness event hosted by Facebook in honor of Women’s Small Business Month. Below are five easy-to-implement strategies that will help all business owners, but especially women, to get a handle on their business finances, become more confident, and ultimately enjoy more success.

5 strategies to help women manage business finances

1. Shift your mindset around finance

This truly is step one. It is important to change your mindset when it comes to your business finances.

Don’t get scared by the term “finance” and trick yourself into believing it's terribly complex and confusing. What I always try to remind clients, especially those who are initially intimidated, is that finance really is just basic arithmetic: addition, subtraction, multiplication, and division. It's the skills you’ve been using for years to pay bills and calculate tips, not advanced calculus. (Besides, despite what many of us internalized in childhood, girls aren’t bad at math: a 2019 Carnegie Mellon University study showed there was no gender disparity in how boys and girls learn and perform in mathematics.)

The other part of this is moving away from viewing your business finances as a dreaded chore. Your business is a living, breathing entity like a plant or person, growing and changing every day. Managing your finances allows you to get to know what your business is trying to say to you, and helps you to understand it on a deeper level. Relish this opportunity.

2. Learn the language of finance

After that mindset shift, the next step for women who want to start managing their business finances is to learn the lingo. Start demystifying phrases like “gross margin” and “net operating income.” If there are terms that seem to pop up a lot, look them up. There are many resources available to business owners that will explain these things in layman’s terms as you’re getting up to speed. I recommend checking out the QuickBooks Resource Center blog, which does this very well, and the Boost with Facebook Group, which will help you connect with other entrepreneurs you’re comfortable asking questions. This is especially useful if the “official” definition sounds too “accountant-y” to you and you want to ensure you understand correctly.

More articles from AllBusiness.com:

• How Crowdfunding Helps Close the Funding Gap for Women Entrepreneurs
• 6 Secrets to Growing a Successful Home-Based Business
• Bouncing Back From the ‘Shecession’: Startup Tips for Women Entrepreneurs
• Top Online Tools to Automate Your Business Finances
• 10 Ways to Better Support Women-Owned Businesses

Once you’ve looked up these terms, go a step further and create a running list on your phone with the definitions. Having this “cheat sheet” handy will help build your confidence as you’re familiarizing yourself with finance. What’s more, having comfort with financial jargon will help as you read reports and statements, allowing you to digest the information rather than wondering, “What does this term mean?”

3. Build a cloud-based workflow

There has been a massive explosion of online technology that is available to help you manage your business finances. Take advantage of it.

One of the best things about getting on the cloud is it allows you to work anywhere, anytime, and from any device with a browser. There’s no reason to be stuck at a desk, tied to one computer. Using software like QuickBooks means you and your team  can process transactions, pay bills, run reports, and send invoices on the go. This also makes it so much easier to check in and get a real-time look at how your business is doing financially. I recommend looking at your books daily. As I said before, your company is a living entity that changes, and I believe your business will flourish as vigorously as you attend to it.

4. Define what you want success to look like

We all have different goals and different definitions of success. It’s important to consciously think about what success looks like for your individual business, whether that’s a certain amount of profit or sales at the end of the year, growth and expansion to a new market, or making an impact on a specific number of people. Think about how you will define success for your business and write it down.

Then, when you look at your financial statements, remember your definition of success and the targets you set for yourself, and compare how you’re tracking against this. Maybe you’re right on track, or maybe you need to change something to help reach your goals. Regardless, having the accountability of knowing where you’re aiming when you’re reviewing financial statements is helpful and grounding.

5. Commit to weekly meetings with your business

Open your online calendar and make a weekly, standing appointment with you and your company. This is a sacred meeting—time for you to check in with your business. Like any important meeting, don’t skip it. At first, maybe it’s just you and your computer, and maybe later you invite someone else to the meeting, such as your CFO, office manager, or accountant. But take this opportunity to review finances. Remember, that’s your business talking to you, telling you what it needs, what it’s ready for, and what you need to keep an eye on. "What were my sales? How does this compare to last month? What were my costs?"

This regular, ongoing connection with your business finances will help you recognize accomplishments and navigate challenges.

These 5 strategies set you up for success

By following these five strategies for women to manage business finances, any finance novice can get their business set up on the right foot. Having taken these steps will help you and your business immensely, whether you decide to continue managing the finances yourself now that you’re familiar with everything, or you turn to an accounting partner for their further expertise.

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