This may be unwelcome news but if you want your business to be as successful as possible, you need to get your business finance in order. Maintaining well-organized records for bookkeeping, tax and other accounting matters may not be the most glamorous part of running a company but it’s essential for improving its running and planning future growth. Here are a few ideas on how to get your business accounts in top shape, and keep them that way.
1/ Keep Personal and Business Finance Separate
This is a legal requirement if you’re a limited company or corporation but even sole proprietors should never mix the two. You should have separate bank accounts as well as credit cards for your business, with separate accounts, tax-deductible expenses are also much easier to keep track of.
2/ Hire a Professional Accountant
If you’re not a natural with numbers, hire someone who is. Employing a professional to oversee your accounts will save time and pay off in the long run. At the very least, seek out a professional tax advisor before filing your annual return, as you’ll likely make greater savings with expert guidance.
3/ Upgrade Your Software
Still muddling through your finances using an outdated and inefficient computer program? Investing in dedicated accounting software which can integrate the different parts of your business will allow you to survey your overall financial health in one place and in real time. You can even transfer your entire business finances to the cloud and keep track of everything using your tablet or mobile phone.
4/ Don’t Procrastinate
Make time to update your books on a weekly basis so that things don’t pile up. Start gathering documents for next year’s tax returns as soon as you’ve submitted the previous year’s return, rather than rushing to find the necessary paperwork at the last minute.
5/ Chase up Late Payments
Maintaining a healthy cashflow is a critical component of any business’ finances, yet many small businesses suffer from regular cashflow problems. Late payments by customers are the main reason why businesses run out of cash so don’t let unpaid invoices sit around the office. Instead, institute a series of friendly reminders with gradually increased penalties for late payers.
6/ Create Short-Term and Long-Term Goals
Having your finances in order means not only knowing the current state of your business but where it’s likely to be in twelve months from now. Weekly or monthly goals will help you spot inefficiencies and make savings while a twelve-month plan will allow you to analyse business cycles and adjust accordingly. Finally, make a 5-year financial plan to crystallize your vision and give you something big to strive for.
Creating a workable system to keep your business finances organized takes time at the beginning but it’s likely to pay long-term dividends if implemented properly.