Last Updated on March 14, 2021 by Husain Parvez
Aside from knowing how to manage your personal finances, being able to manage your business finances equally as important. Managing your business finances is a bit more difficult than managing your personal finances. With personal finances, you can choose to save or spend money and you are only responsible for the money that is in your bank account. With business, if you spend money you do not have, it can affect not only your company but the companies you do business with as well.
Invest in Quality Bookkeeping Software
No matter how good you want to be at managing your business’ finances, it will never become effective and efficient without the help of bookkeeping software. Sure, you can get by with just a general ledger system but it is not going to save you time or energy. This is why you need to invest in high-quality bookkeeping software so that it can help you make your life easier. When this happens, you will have more time and energy to focus on the things that really matter in your business such as developing systems to improve your operational efficiency.
Accept and Use Different Forms of Payments
We are living in the digital age, which means that people mostly prefer paying digitally rather than using cash or checks. Aside from that, many individuals use their credit cards more often as well. People are getting busier and they cannot attend to everything physically. It is easier to do things over the internet nowadays and the popularity of Internet business transactions has grown so much. Whether you are running an eCommerce website or a brick-and-mortar business, handling your business finances is one important aspect of your business since it would affect your bottom-line.
Employ Mobile Payment Systems
Millions of people use mobile payment systems today. Whether it is a family member, friend, or yourself, everyone can benefit from such a tool. In fact, your business can be greatly aided by the use of such a service as well. Using Mobile Payment systems for your business will give you a greater opportunity to trade, not only in your locality but also internationally. The time has arrived when businesses are now able to accept credit card payments through mobile or cell phone. And this is possible through the use of mobile credit card machines that are readily available.
Develop Your Own Financial Dashboards Quickly
How effectively do you manage your business’ finances? If you’re not sure then you will want to read this article. Setting aside a little time each week can really make managing your business’ finances much easier and more efficient. By compiling your own financial dashboards, you can easily monitor the financial status of your business each week. This way, you don’t have to waste time trying to find out what the current cash flow situation is in your business.
Follow Your Money
It is not only important to have a sound plan in place for growing your business but a system that enables you to monitor the money your business makes/spends on a daily basis. There are many small businesses out there that have no idea what their weekly, monthly, and yearly trends are because they don’t have an accounting system in place. Only when you follow the liquidity of your business on a daily basis can you be sure that things are going according to plan, and also look out for any holes in your plans.
Have an Expert Draw Up Your Payment and Deposit Terms
Managing your business’ finances is one of the most challenging tasks for entrepreneurs. It is very important to have a good setup on your financial management systems so these tasks can be completed in a more effective and efficient manner. The last thing you need is to be disorganized with your finances and not organized with bill paying, deposits, and other financial documents like contracts and receipts. A third-party accountant will be able to provide you with a service that is much more effective than self-management.
Plan Your Taxes in Advance
Taxes are inevitable, whether you like it or not. Planning ahead for your business’ taxes don’t run top of mind when managing your business finances. However, it’s an important part of your business operations to consider. It will save you time, money, and frustration. From income tax to self-employment tax, to payroll taxes, capital gains, dividend tax, and property tax. Ensure there is a plan beforehand. In order to minimize your taxes, you need to know what deductions will be available to you. A good accountant will be able to provide a list of deductions that apply to your situation. Be sure that your accountant will provide you with the maximum exemptions possible for your business.
Separate Your Business Accounts from Personal Accounts
To help better manage your business finances, it is important to separate business and personal accounts. Whenever you can, consider making payments from business-only bank accounts. Similarly, separate your business spending from personal spending by using different credit cards, at least for expenses with a work purpose (for example, travel or meals at an industry event). Keeping your business and personal finances separate allows you to keep track and organize your business transactions in one location. The benefits of this method include lower fees, easier access to information, and easy tracking of where your money is coming from when it’s spent.
Managing the finances of your company can seem like a daunting job. However, with the sophisticated systems available today, you don’t have to call a professional accountant for your small business. Instead, you can concentrate on learning the basics and purchase simple and efficient software solutions to make accounting easy. You can also go for flexibility with payment options to make your potential customers select the type of transaction that best suits their needs.