There is nothing worse than being all excited to start a business, only to have zero clue how to organize paying your employees, buying your premises and stock, paying your rent, insurance, utilities – the finance side of business is confusing. The finances are confusing but it’s why going into business is a big deal. If you’re not making money, your business is not a business it’s a hobby – a very busy hobby. You want to be able to make as much money as you can with your business and it’s not all about paying other people. It’s for you to feel like you’re going to succeed, but for that to happen, you need to properly manage your finances. For that, you may need to start asking yourself whether you are equipped to manage your business finances yourself.
You need to take as many steps as possible to organize your small business finances, and it could start with Outsourced payroll help so that you can have an expert pay your team on time what they are owed. You should consider your profit goals and how you plan to get there, then you should consider how you can organize your small business finance accordingly. So, with this in mind, we’ve got six clear steps that you can take to organize the finance for your small business today.
- Track Income. It’s so important that you are able to track your income and if you have an outsourced expert with you, they will be able to watch your income and outgoings. You can do this yourself, too, by breaking your income into pieces from where it comes and you can categorize these so that you can keep an eye on how much you can get and from where. If you have the right invoicing and bookkeeping software, you can ensure that you are able to keep an eye on the money coming in. If you know you have the right programs to track your income, you can monitor to see how the income fluctuates.
- Tracking Expenses. As well as tracking what comes in, you must also track what goes out. Knowing where you are spending your money and how much you spend, you can rein it in as you need to. You can learn how to deduct what you need for your taxes, too. If you track your expenses for your business, you should also track your expenses for tax purposes, too. You can then better audit your expenses and make sure that you’re not overspending, too.
- A Separate Bank Account. When your business begins to make money, you need to separate your finances and open a business bank account. When you mix your personal and business finances, you can hit a wall with your accountant! You need to make sure that you know what you’re doing with your taxes and mixing your income with your personal money is going to cause some issues. Protecting your personal money while you manage your business money is a must, and you need a separate business bank account to ensure that you are looking after your business finances properly. The last thing that you need is a mix up with the tax people!
- Add Protection. Your business needs a level of protection such as insurance, but you should also consider establishing an LLC if you can. This can separate your entire business identity and if you have to ever undergo any legal issues, you will not have your personal and business finances mixed up. You need to be able to manage your certifications and licenses, and it’s much easier to do this if you have the right establishment label.
- Payment Receiving. You want to make receiving payments as easy as possible and this means determining how you will accept payments from others. You should consider how your business currently works and if you provide a specific service, you want to ensure that your invoices and terms are sent out regularly and on time to clients.
- Get Online. Moving all of your finance information and files online is important. Almost all paperwork has been converted into digital documents, and you may not have everything in your file cabinets right now. Keeping track of accounting is much easier when you are doing it online or via a digital space.
These are the basics to get your small business finances going. There are many other tips that you can use to help yourself to manage and track your money – why not start with these and go from there?