Online and offline business are equally in need of financial planning. In fact, more is needed in the financial management of online business marketing strategies because it involves abstract in cyberspace. Financial management means applying the principles of financial management related to managing the procurement of products distributed through social media.
Financial management is important to do because it involves planning, management, and regulation of financial activities. There are four functions of financial management for online businesses.
1. Estimate capital needs and resources. Online businesses should estimate the budget before starting his business. This estimate includes costs, profit, sales strategies, and promotion to the target market. In online business, the financial management function estimates the amount of funds needed to supply the products sold, the purchase of a private domain, and the wages of human resources to manage the use of social media such as administrators, web developers, web designers, or a social media officer.
2. Serve as guidelines before making action plans. When capital and resource estimates have been made, or the composition of the capital structure to be designed. The capital structure is written in the action plan. The action plan includes short-term sales strategies and long-term. For online businesses, the action plan contains the allocation of funds for each item, for example, to the post shop offline and post social media development.
3. Management and out of money. Financial management is important to know the flow of money or transactions that occur in the online business. Online entrepreneurs need to have financial management for sellers and buyers are not face to face directly the transaction. Financial management helps online businesses to monitor the flow of transactions, such as payment of shipping costs up to the hands of the buyer and the buyer through bill payment confirmation.
4. Financial control. Like business in general, business finance online should be monitored in order not to experience losses. Online business is the person who has the right to decide whether a sum of money should be issued or not. Financial management helps online businesses in determining the decision.