There are many headaches that go along with financials for small business owners. It can drain entire days and make you feel that your success is untouchable. First and foremost, take a deep breath. You got this. The best way to tackle your accounting is by getting organized. Once organized, stay organized! Use these simple strategies and watch your business blossom.
Keep Business Away From Personal
I know it is tempting and seems so easy, but you will kick yourself later. Keep separate bank accounts and credit card accounts for your business and personal spending. You will save hours upon hours of work while making it easier to keep track of deductible expenses and all in one place. We recommend handling business and personal finances as independently as possible.
Detailed Daily Expenses
It’s very important to keep records of all of your everyday company expenses. Do this everyday and every week, not just every two weeks when you do payroll. This will help you have a good idea of how finances are at the end of every week, not to mention how much you will have to budget for in the future weeks to come.
Hire A Pro
Many people think they can do all jobs at the same time in order to lower overhead. The truth is, it may benefit you to hire a bookkeeper. It is so important to have your accounting done right and as thorough as possible. Think about a freelancer or someone part time to get you started. This way, you are not paying full time wages, yet you are having a professional work solely on financials. Now your focus can be on new ways to bring IN money!
Make Everyone Pay
You don’t want your company to be surviving off of loans and investors. The sink will ship fast if you are not standing on your own in a matter of time. Your receivables department is a critical piece of the equation. Checks and liquid cash are basically what makes them real and part of the actual books. The point? The money does not matter until it is collected and in your account. Be firm with clients and stern about cycle payments. The best way to do this is to not issue more orders until previous orders are paid in full. You are running a business, not doing favors.
Minimum Monthly Profit
Last, but certainly not least. How much does it cost to run your business? Calculate all of your overhead and other expenses that you must have to keep your business afloat. You need to do this with monthly costs and this will help you to determine the goals in which you must meet each and every month.
It may seem like a lot, but your business will have a better chance running like a well oiled machine if you get organized and use these helpful tips. Doing a little more now, will make later a lot easier.