Keeping your business finances in order is crucial because it can help you project your business’ growth, determine how your earnings and expenses stack up, and make informed decisions.
Managing finances, however, can be difficult at times particularly for business owners who want to do everything alone. To make finance management and accounting more manageable, here are some of the things entrepreneurs should keep in mind:
Personal And Business Finances Should Not Mix
Keep your business and personal finances separate because mixing them can lead to confusion. While it may appear convenient to charge all your expenses to one card, this will make it difficult to track your spending. Do open new bank and credit card accounts for business purposes alone.
Make a budget that you will use as a guide to help you make clear decisions about your cash flows. It will come in handy if you have to decide if it’s feasible to increase your expenses on marketing or if it is a wise idea to cut expansion costs.
Experts advise setting aside about 15 minutes per week to plan and organize your finances. Besides giving you better insights into your business, this will also get everything organized for tax purposes.
With good planning and an organized financial plan, you will also be able to mitigate dangerous consequences of unwanted surprises such as unexpected expenses. You should not run into major problems once these arise if you have covered potential issues in your long-term plans.
Track All Payments
Many small business owners fail to track invoices and payments. If you do not keep proper records, you may realize too late that you have outstanding invoices. Track all payments due and make a record whenever an invoice is paid. You should also take note when your customers pay and which of them you have had difficulties collecting payments from.
Hire A Pro
Accountants can prove invaluable for business owners who easily lose track of their finances. You may save some money if you do not call in an accounting professional but the knowledge and experiences of these professionals, particularly about tax laws, can actually help save you money. They can keep you penalty-free and may even find more deductions for you.
ORT Consulting has years of experience handling accounting and tax issues for businesses. Contact us for bookkeeping, accounting work and tax preparation services.