Small business owners have loads of financial information to think about. We know this can be overwhelming sometimes. But it is vital we keep an eye on it.
The most important thing for your business right now is have a system in place for dealing with your professional finances.
Once you have a good handle on your finance you can better plan for the future in both your business and personal life.
Develop invoice chasing
Cashflow, or lack of, is the biggest cause for businesses to go under. Make sure you have a system for chasing outstanding invoices or this can seriously hurt your business. You should be chasing at 30, 60 and 90 days. Consider phone calls as well as email chasing. Or consider outsourcing this aspect of your business.
Plan for big expenses
Ideally we want to avoid taking out loans and credit for big expenses. In business you will often come across opportunities that might take a big chunk of cash. Whether it’s an important industry conference or a laptop that unceremoniously decides to crash on you, you will need a contingency to ensure you stay on top of it.
Set aside a ‘business saving’ or ‘contingency pot’ so you can continue to run your business efficiently when these big expenses occur.
Track every expense
Some business expenses are tax exempt or even a tax write-off. Be sure to record every single expense, large and small, so that when tax return time comes around you can ensure you are paying the correct taxes. You never know, you could be saving your business money.
Record your deposits
Income can come from a variety of sources and not all of them will be tax liable. So ensure every deposit into your business is recorded.
Set aside cash for taxes
There is nothing worse than a surprise tax bill. So beat them to the surprise by setting aside a regular amount of cash ready for paying your taxes.