Are you feeling frazzled when it comes to your company’s finance? Do you feel like you’re juggling too many balls in the air? Don’t worry, you’re not alone. Many small business owners feel overwhelmed when it comes to their finances. But don’t fret, there are a few simple tips that can help organize and streamline your business’ finance. Check out these six tips below!
1. Set up separate personal and business banking accounts
Tax time can be a nightmare if you don’t take the right steps. Create two different accounts: one for a Business checking account and another saving account that is used only when it comes to taxes, so they are both separate from each other!
If you’re a small-business owner, it’s important to keep your personal and business finances separate. You shouldn’t have any transactions flowing through either account if the company is organized as an LLC or corporation but you really need to do it even if you are a sole proprietor.
By managing your small business finances in a separate account, you can more easily keep track of all the numbers.
2. Set aside money for taxes
By setting money aside on a monthly basis, by making quarterly tax payments, you ensure that your money is available for the state and local income taxes,. This way it’s always there when they need it!
3. Set up a filing system
Whether you go with a paper or digital filing system, here are some of the items to keep in mind:
- Accounting and Bookkeeping records (Profit and Loss, Balance Sheet & Cash Flow)
- Bank and Credit statements
- Contracts
- Licenses
- Employee/Outsourcing
- Tax papers
Consider buying a filing cabinet or pretty file box for your paper records. If you’re keeping the old-fashioned kind, I recommend Google Drive and setting up folders in which to store each year’s finances!
4. Use an accounting program
Yeah, you could keep everything in a spreadsheet. But who has time for that?
There are a ton of free and low-cost accounting programs out there to help you save time, money in the long run like QuickBooks, Xero, Wave and Freshbooks
The most popular small business accounting software is QuickBooks. It has a wide range of features to help you manage your company’s finances.
This program also makes it easy for entrepreneurs who only have limited time because they can set up their accounts in short order without too much hassle!
When you’re looking for a new accounting program, it’s important to think about what your business needs. Some things that should be considered include:
- Does it send invoices and tracks?
- How easily does track your income and expenses?
- Does have a Profit and Loss Statement and Balance Sheet?
- Do you track bills?
- If you have an employee who does have payroll processing?
- Can there be multiplying users?
- Can you integrate your credit card processing like Stripe, PayPal, and Venmo?
- Does it have inventory to manage?
- Does it link with your bank account to pull the bank fee?
- What is the learning curve?
5. Take advantage of mobile apps
The many aspects of running a small business can make it difficult to stay organized. Mobile apps offer an easy solution for this problem by providing you with finances and other key information so that all your bases are covered!
If you use QuickBooks Online as your CFO, their Receipts by QB app will help keep track of all those pesky receipts so they don’t end up crumpled at the bottom of your purse (or does that only happen to me?). Simply snap a photo with your iPhone and send it over; within seconds what was once just some paperwork is now an accounting transaction!
MileIQ is a great way to keep track of your driving records, and it will even calculate the distance you’ve traveled based on how many times you swipe. This app also has an automatically generated report that summarizes all aspects including total miles driven as well at any other special requests!
Expensify is a mobile app that lets you track your expenses and billable hours. You can also use it with QuickBooks or Xero, two popular accounting software programs!
6. Schedule time to stay organized
The key to your financial success is organization. Whether you’re keeping track of data in software, scanning receipts and filing taxes or paying bills on time – make sure this important task gets marked down as a priority each week!
Financial diligence is incredibly important, and it can be difficult to find the time. Fortunately, there are ways of working through your finances in small bits over a longer period of time – I recommend 15 minutes each month or so! If you’re like me though (and want instant gratification), then just set aside half a day once a month on this task; make sure that when deadlines arrive they’ll motivate you into getting things done. 😉
Without a business system in place, you don’t know if your company is profitable and nobody wants that. Plus it will help prevent headaches at tax time – so take some of these tips to heart when managing finances for small-business owners!
