Managing your small business finances well is a crucial part of keeping your business running smoothly and successfully. Disorganized finances could mean sacrificing cash flow, missing out on valuable tax deductions and ultimately setting your business back. If you’re ready to get a better handle on your business finances today, check out these five tips for getting your small business finances in order.
Separate your business and personal finances.
Combining your business and personal finances (i.e., putting everything in the same bank account) may be tempting, but over time, it will complicate things. For one, it can be hard to track your business spending when you’ve consolidated it with your personal spending.
The first thing you want to do when setting up your business for financial success is to establish its structure to make a clear distinction between business and personal finances. Common options include LLCs (Limited Liability Companies), Partnerships, Sole Proprietorships and S Corporations.
Hire a qualified bookkeeper.
Hiring a bookkeeper is a great way to help sort through your business finances and set up a financial plan. Professional bookkeepers can help restructure, reorganize and keep track of your business’s cash flow.
These professionals understand marketing strategies and will figure out how to keep costs low, increase revenue and find potential tax breaks. In addition, bookkeepers can also reconcile your monthly books and create custom reports in order to plan your sales and marketing strategies.
Create a budget.
Running a successful small business is impossible without a business budget. Putting a budget in place allows you, as the business owner, to view the full picture when it comes to seeing where your money is coming from and where it is going.
Additionally, creating a budget allows you to be wise about your spending priorities and be diligent in your future financial planning. This step is critical and can ultimately help relieve stress. If you utilize QuickBooks, you can prepare a budget within it’s program.
Limit your unnecessary expenses.
Take a look at your monthly expenses. Can your business survive without some? If your business can successfully run without certain expenses, get rid of them.
For your necessary expenses, try to downsize them. For example, you can try to find banks that don’t charge monthly fees or have any “hidden” fees. QuickBooks has a built in way to plan out your expenses based up on your current spending.
Create a plan to increase your revenue.
And now for one of the most important tips for getting your small business finances in order: creating a plan to increase your business’s revenue stream.
To do this successfully, you will need to have followed the previous steps. Once you’ve done that, you will be able to review your income and develop a concise plan to increase your revenue.
Running a successful small business relies heavily on the status of your business finances. But by planning today and following these tips for getting your small business finances in order, you have all the tools you need to get started!
Need some help along the way? From setting up financial plans to handling bookkeeping and more, the Todd Greene team is here to help! Plus, for more financial tips and news, continue reading our blogs.