If you’re a small business owner with a handful of employees but have a large customer base, or are a solo entrepreneur handling all of the accounting for your company, make sure you have an efficient and streamlined system in place for managing your finances. Too many businesses fail to keep accurate financial records and can end up dealing with cash flow problems and credit issues because of poor financial management. Taking steps to clean up your accounting practices and ensure accuracy every step of the way will help your small business in the long run.
Use these tips to streamline your company’s finances:
Separate Business and Personal Expenses
It may seem easier to charge some last-minute business expenses on a personal credit card, or make payments for certain expenses using your personal checking account. However, this shortcut will catch up on you come tax time. Make sure you separate your business and personal expenses so that you always have an accurate picture of your company’s cash flow situation, and are aware of how much is going out of your business account each week. Apply for a business credit card if you need to, and open up a small business checking account to make things easier.
Invest in the Right Accounting Software Program
Accounting software can save you a lot of time and energy when it comes to creating and collecting on invoices, keeping track of vendors, issuing payroll checks and reviewing your cash flow statement. Take some time to compare different accounting software programs so that you can find the best match for your business. If you run a retail operation, you may need a more advanced software program. If you’re running a service business online, you may benefit from a very basic program.
Review Budgets and Financial Documents on a Monthly Basis
Catching financial mistakes and problems early will give you some time to fix errors and make better decisions in the future. Get into the habit of reviewing your budgets and financial documents such as income statements, cash flow worksheets and even a balance sheet just once a month so that you can detect problems and fix them as quickly as possible. Being proactive with your money management efforts can save your business from serious financial problems in the long run, and might also give you some peace of mind as each quarter rolls by.
Taking steps to streamline your company’s finances can help to ensure all business operations run smoothly and that you don’t encounter serious cash flow problems in the near future. Use the tips above to take control of your company’s finances and improve your business’s financial situation.