Keeping track of the finances of your small business is no easy feat. One small mistake can be the reason why the business goes under in just a few short years. Knowing all the expenses and financial matters that goes around the business will ensure that cash flow is always running. Here are a few tips to help small business owners with essential financial tracking needs:
1 – Start Right
The best way to ensure your finances are in order from the moment you open your doors for business is to hire an experienced bookkeeper or use QuickBooks hosting. These are necessary to allow accurate income and expense tracking.
2 – Review Expenses Regularly
Small expenses can easily add up and cost the business a fortune at the end of the year. Always do your due diligence by reviewing expense reports to see if there are unnecessary expenses that you can cut back on.
3 – Have A Strict Invoicing Policy
Be extra vigilant when it comes to your invoicing policy. So many small businesses make the mistake of forgoing invoices thinking these aren’t important, but they are necessary. By using QuickBooks hosting small companies can easily keep track of all invoicing coming in and going out.
4 – Keep Personal And Business Accounts Separate
Never mix personal money with business because this is the fastest way of going bankrupt. Plus, using a personal account for business only leads to a lot of tax problems in the near future.
5 – Make Timely Loan Payments
Business owners who took out loans to start their company should set aside monthly payments for the loan. The sooner you can pay back the amount owed, the sooner your business can start earning more.
6 – Pay Yourself
Just because you own the business doesn’t mean you shouldn’t get paid. In fact, it is highly recommended that you include yourself in the payroll to give you a safety net in case of any unforeseen expenses.
7 – Don’t Abuse Ownership Privileges
When it comes to giving yourself a salary, set it at the lowest amount possible. Staying frugal while starting out is a great way to train yourself to work harder. Plus, this way you will have more flexibility with income during off-peak season.
8 – Don’t Go Too Big Too Soon
Although business might look like it’s picking up, don’t waste money on expensive business cards or a company car just yet. Spending too much money too soon will only result in a blockage in cash flow which will harm your business.
9 – Pay Bills On Time
Schedule all your bill payments to be done automatically so that you don’t have to spend extra money on late fees. Regular timely or early payments can also result in discounts which result in more savings for your business!
Don’t wait until it is too late to start fixing your finances. The longer you let expenses slide without tracking where your money goes, the sooner you will lose your business.