5 Tips to Keep Your Small Business Finances Running Smoothly
So you’ve decided to start your own business. Have you considered how much time you’ll spend taking care of your finances?
For many small business owners, business tasks are one thing that never crosses your mind. Yet, it can take up a ton of time, which makes running a successful business that much harder.
Here are 5 tips to keep your small business finances running smoothly:
- Don’t mix business with pleasure
Keep your business purchases separate from your personal purchases. Sure, you can pay your business back for that quick stop at the grocery store, but if you’re going to do it right, you need to record an accounting transaction. Mixing your expenses can complicate things fast. By maintaining separate bank accounts and credit cards for your business and personal use, you’ll save yourself hours of work and it will make it easier come tax time if you keep your business and personal finances as independently as possible.
- Call in a professional
While it might be tempting to do your own books in hopes of saving yourself a buck or two, in the long run, it will probably end up costing you more. Accountants have an intimate knowledge of their profession. They will almost always find more deductions than you can, while also keeping you penalty-free.
- Put it on the calendar
Set aside at least 15 minutes every week to organize your finances. Put it on your calendar and don’t let other things take priority during this time. You’ll probably always find something that’s more pressing than reviewing your books, but this investment of time will yield way more in returns because you’ll have more insights into your business, and you’ll be able to make more informed financial decisions.
- Don’t forget your people
One of your biggest expenses will be labor. Whether you have one person on staff, or 15, be sure to track the cost of wages, benefits, overtime, and any other costs that might be associated with labor. It’s important to know if you’re overspending your budget, or if you have a little extra to give someone a bonus.
- Be sure to get paid
While it may seem rather obvious, it’s shocking at how many small business owners don’t properly track invoices and customer payments. If you’re not maintaining records on a timely basis, you could easily be months out before realizing you have outstanding invoices. Make sure you track all payments, when customers pay, how long it takes a customer to pay, and which customers you’ve had challenges collecting from in the past.
So follow these 5 tips to keep your business’s finances running smoothly.