Running a small business can be incredibly fun and rewarding. It can also be very tough. If you’re not fully prepared for the adventure ahead, you’re going to get yourself into big trouble.
How to Keep Your Small Business Finances in Check
One of the most difficult aspects of all is trying to manage your finances. To ensure that your business thrives, it is pertinent to maximize your earnings and minimize your expenses. This can be far tougher than you could ever imagine. Within this in-depth guide, you will discover tips for keeping your small business finances in check.
There will undoubtedly be times when you run into financial difficulties. How you deal with those troubles will make a huge difference in your business. When you need to gain access to additional funds, you should consider selling excess stock and equipment.
There is a good chance that you have equipment and items that you do not intend to use and cannot sell at the regular prices. You can sell these items to other companies for a little bit of money. The money gained could keep your company afloat just a little bit longer.
Related: How to Sell Stock in Your Company
Layoff When Necessary
It is never fun to let your employees go. Nevertheless, there may very well come a time when you’re forced to do just that.
Laying off your workers is tough, but you might have to do so in order to save your business. If your company is losing money and you’re spending way too much, you really have to consider it. Just remember that the layoffs can be temporary. You can always hire back your workers whenever your company recovers. Laying off will decrease your expenses and allow you to save more money from month to month.
Pay Your Taxes
As Ryan Greeley from Better Credit Blog notes, failing to pay your taxes on time will come back to haunt you in the future. You’re not going to get out of paying your taxes. If you do not pay them on time, you’re going to be hit with penalties and interest. Whether you’re self employed or your company is a corporation, you should make sure that your taxes are paid when they’re due. No ifs, ands, or buts.
Hire A Personal Accountant
Owning and operating a small business entails a lot of details, tasks and responsibilities. One of these responsibilities is finance management, which can be extremely difficult for someone who does not has experience in the field. One of the best ways to keep your small business finances in check is to hire an accountant to do it for you. This will not only help you keep track of your accounts, but also will give you more free time to focus on the operations of your business.
Most small business owners will deter from hiring an accountant because of the extra expense. While you will need to pay for the service, it might just pay off in the long run, giving you peace of mind along the way.
The accountant will manage all of your business accounts, file your tax returns and help you make decisions about allocating your resources.
Manage Invoices Properly
Even small businesses conduct a lot of transactions within a single year. Many of these transactions involve cash payments, while others are made through debit and credit cards. If you fail to keep track of the products and services provided to customers, you will risk losing money that is rightfully yours. Most businesses hire employees with a background in finance for this task.
Separate Your Business And Personal Finances
When you are running your very own small business and are in charge of everything, it can be extremely easy to get your personal and business finances mixed up. So, how exactly do you avoid this?
Well, your first step is to set up a checking and savings account that will be used solely for business purposes. This will give you a debit or credit card that you can use for business purchases only.
In addition to this, if you place 25 percent of your earnings into that newly created business savings account, you should accumulate enough money to pay your taxes at the end of the year.
Take Advantage Of Tracking Software
You don’t have to be one of the big boys in order to take advantage of finance software. Those days of keeping receipts in a shoebox are over thanks to all the technology available today. Whether you are just starting out or have been in business for ten years, you will be doing yourself a favor by investing in financial software. In fact, there are several software programs that are built and tailor made for small businesses. This software will help you easily and quickly track what you owe and who owes you, which is extremely handy when it comes to keeping your finances up-to-date.
So what do you think? Are you going to keep your small business finances in check?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.