When you’re running a business, the last thing you want to be worried about is all the little details of your finances. Yet, accounting is quite possibly the single most important factor of your business’ success. So how can you strike a balance between managing and growing your company and making sure your finances are right where they should be? Here are 5 simple ways to plan ahead for success.
Keep things separate. As tempting as it may be to grab your business credit card to pay for your kid’s new school clothes, making sense out of comingled funds can be a nightmare – especially if you find yourself knee-deep in an audit. Avoid this headache by always keeping your business expenses separate from your personal ones.
Schedule it in. Unless you have an affinity for accounting, chances are you dread the deed of sitting down and organizing your finances. The problem is, if you let it go too long, you’ll have a much bigger problem on your hands. Keep accounting manageable by penciling in time on your calendar – say once a week – to sit down and get things in order. You’ll thank yourself in the long run.
Consider the big picture. One of the biggest mistakes small business owners make when it comes to accounting is forgetting to consider every component of their finances. When you’re budgeting, leaving out a key expense, such as health insurance for your employees, can come back to bite you in the end, leaving you with less money than you thought you had. Make a list of all expenses to ensure everything is being accounted for.
Stay on top of receivables. Simply put, your business will not succeed if you don’t have an adequate flow of cash coming in. That’s why it’s so important to stay on top of your accounts receivables. Send invoices on time and follow up accordingly. If you’re finding that your customers aren’t paying in as timely a manner as you’d like, try some of these tricks to get things turned around.
Get help. Nothing says you have to handle all of your own accounting functions. In fact, nothing even says they have to be managed in-house. If you’re finding it difficult to stay on top of your business finances, and you’re not in the position to hire a full-time bookkeeper, consider outsourcing those activities to an external accounting firm. That way you’ll know everything will be taken care of and you can focus on other, more important business matters.
Staying on top of the financials of your business is critical to your future success. Yet, for most small to mid-sized business owners, this task can be downright overwhelming. These five simple tips should help keep you ahead of the curve and ensure that all of your money matters will be taken care of properly.