Perhaps the biggest surprise for small business owners is how quickly they can fall behind in managing their business finances. The longer you put off tackling it, the worse the situation becomes. Don’t let your accounting fall by the wayside — instead get organized and follow these helpful hints to make it easier for you to get — and keep — your finances in order.
- Don’t let your business and personal expenses overlap
Always keep separate bank and credit card accounts for your business and personal expenses to simplify your accounting. It’s easy to fall into bad habits and grab the handiest credit card to make a payment – but if you’re using your business credit card for non-business related purchases, you’re just asking for trouble. It will take a lot longer to keep track of your deductible expenses if you don’t keep them all in one place.
- Get a good accountant
Too many small business owners fall into the trap of trying to save some money by managing their business finances without professional help. The motivation is a good one, but the road hell is paved with good intentions. Don’t let your business go down in flames because you neglected to hire an accountant. A good accountant can be your greatest ally all year long and particularly at tax time. It’s likely they will be able to find you greater deductions than if you tried to manage it all on your own. If you want to keep costs down for this service — stay organized to save time and incur less billable hours.
- Commit to spending a small amount of time once a week to review your current financial status
By spending less than a half-hour every week, you can save hours, days or even weeks’ worth of time at year’s end getting your finances in order. You will have a better grasp on your expenses that will help you to make informed decisions all year long. When you determine if you are investing too much or too little in your business and/or employees – you can make adjustments along the way. You may be able to eliminate wasteful spending and invest in areas that will help your business grow or incentivize productivity and improved employee performance. When you manage your finances on a regular basis you are better equipped to control your cash flow.
- Track your invoices and collect what you’re owed
This one may seem like a no-brainer but if you’re not keeping an eye on your invoices, you might not be getting paid! Late or improperly tracked invoices and customer payments can add up to a world of hurt. Improper record-keeping can lead to collecting your payments late or forgetting to get paid at all. Your goal should be to know at a glance all payments due, paid invoice dates, the average time taken to receive payment and which customers you’ve had difficulty collecting payment from before. Keep your back-office tasks in the front of your mind and at the top of your to-do list. You will find that it takes much less time and offers many benefits to smoothly run a successful and profitable business.
This post was submitted by Sarah Levy of Merchant Express.
For more great small business resources, visit the Merchant Express Resource Center at MerchantExpress.com/Resources[/dropshadowbox]