What is the reason of getting into business instead of following through the typical 9-5?
Money is a great initiative that pushes us all to wake up in the morning and get through all sorts of trouble just for that paycheck at the end of the month. Businesses depend solely on the amount of money they can bring in and how lucrative they are. Similarly, keeping an eye on the finances is of primary concern for all business people, but to what extent. This article discusses some tips that can help a small business with its financials. It discusses all aspects that are important for business owners when talking about their books, and how to make their lives easier.
Organize, organize, organize; do not become a neat freak though. Everything becomes easier when you remember the word repeated thrice in the beginning of this heading. Especially so, when you are dealing with financial matters that are not only your concern but also of governmental organization such as the IRS.
The best way to be organized is to log everything, into files (if you are classic) or into an excel sheet (also if you believe in antique methods). Whether or not you trust in technology to maintain your books for you is an entirely different aspect discussed in the topics to follow.
Have a specific folder where you keep all of your bills and urgent payables and another where you put in all of your receivable. Review your bank statements on a weekly or fortnightly basis, to calculate and keep track of those pesky every day expenses. They might not seem like too much but a dollar spent is a dollar less for you to perform business essential processes.
Keep track of your money
Technology has made payments so much more easier; however, it has also reduced paper trail. Being organized means easier money tracking; exponential technological enhancement also means that it is more convenient when you adapt technology into your technology practices. Through advanced financial tools and virtual bookkeeping and accounting firm, you pay a quarter on the dollar to better manage and track your financial expenses.
Separate Business from Personal
When starting a business it is hard to separate a business account from your personal account as the expenses are minimal and everything is going out of your pocket. However, it is smarter to always have a separate bank account for both. This helps you keep better control on what you spend and are able to smartly distribute your budget, keeping greater control on your expenses and returns. It also simplifies bookkeeping and reduces unaccounted for expenses. This practice will improve your money management when the business starts growing and becoming more lucrative.
It is a hassle to open additional bank accounts initially but it is an effort that pays well in the longer run. A business is an entity in its own; you are its soul even so your own expenses should not be driven out of your business’s finances and vice versa.
Keep a Checklist for bills
We all have bills to pay, but what is the difference between business bills and personal bills? Business bills are generally a higher priority as paying them off keeps it flourishing and in turn support your personal bills as well. What is common in both is that they are to be paid on time. However, be organized about it and keeping a checklist has never hurt anyone; instead it could actually help you be prepared for reoccurring and unforeseen expenses. This has a trickledown effect on the rest of your financials as well, since your expenses are nicely covered by having them in a checklist you now know exactly how much money you have to spend on other business important expenses.
Hire a Virtual Bookkeeper
Bookkeepers are expensive but they are also essential for all businesses, we have talked about their importance a bunch of times over. Yet, it is still ideal to get one even if you think it is an additional expense that you cannot afford at the moment. There is no good or bad time to get a bookkeeper or better yet an accounting and bookkeeping firm for small businesses. Having your back covered with a financial consultant can help you relieve off, of the burden of tax season, also improve on your transparency, and generally just make your life easier. In a way that someone else worries about tracking, your money and you simply look at the numbers after they have been aggregated and demonstrated into graphs and charts.
The toughest yet most important part of owning a business is to manage the finances and maintain profit margins as well as update books and prepare for tax time. It is an integral part of business processes and it is one that takes the biggest toll on business owners. Remember the tips discussed above and get a professional such as Monily to help you manage your small business’s finances.