4 Ways to Organize Your Business Finances for Success
Running a business is no easy feat. From the day to day challenges of people management, keeping customers happy, and balancing your life outside of work each day can present a new mountain for you to climb. However, through all of this, you aspire to be the best version of yourself and tackle the challenges head-on. A true gentleman does this all with grace and a cool face when he is presented with obstacles including making sure to Organize Your Business Finances to ensure success.
One challenge you may face is understanding the best ways to tackle your business’s finances and how to organize them. Organized finances can have a positive impact not only on your business but also the stress you put on yourself to be the best. Luckily for you, it’s much easier than you may expect.
Follow along as we jump into a few ways you can set your business up for success through well organized and understood finances.
Tracking expenses seems pretty basic, but many business owners don’t do it in the first place, or they try, but don’t do it correctly. Think to yourself for a second, just how many expenses you have around you in the office. The wifi you’re using for your laptop, the pen and notepad and various other office supplies, the utility bills to keep the lights and power on, etc.
Expenses stem even further from the everyday things you encounter, however. When you spend money on your business card, those are expenses, and those receipts should be saved and documented. If you haven’t set up a business card, remember that is one of the first steps you should take when opening a business to help your financial organization start on the right track. Tracking your expenses is wise not only for tax purposes but also for understanding where your money is going and keeping track of your cash flow.
Cut Expenses Where Possible
While tracking expenses is a great way to understand where your money is going and how you should budget, cutting unnecessary expenses is just as important. During these times of working from home, office space may not serve your business any purpose. Negotiate with your landlord on the terms of your lease; if you’re able to sever the lease agreement and go fully remote, you’re bound to save a few thousand dollars every month. On a smaller scale, just as we did above, take a look around and consider what in your office has a positive ROI and what does not. If something isn’t going to aid in your business’s aspirations, it can probably go.
Other hefty expenses can be lunches on the company card or high marketing spending. Knowing what types of expenses are tax-deductible can help you make better-informed decisions and save you money. The term “cutting expenses” can be seen as a negative. Still, your ability to differentiate between what is necessary and what is not can be the difference between turning a profit and not.
Digitize Your Records
Aside from having to remember dozens of passwords, embracing financial technology can make your life much more comfortable. As a busy business owner, the last thing you need is to log expenses manually or keep track of paper receipts only to lose them or try to remember what a particular expense was from on your bank statement every month. User-friendly expense tracking software can quickly snap a picture of receipts and log expenses on the fly. This keeps you moving and helps you focus on what’s vital to growing your top line, but it will also give you an excellent snapshot of where you stand. From your phone’s convenience, you can have all your expenses backed up and linked to your other accounts to get a full picture that’s simple to digest.
Besides the time-saving benefits of digitizing your financial documents, it also serves as a more secure way to store your records. Paper receipts, invoices, and other important documents may wither over time. In the event of an accident, having everything backed up digitally can leave you to rest assured you have a file on hand and ready for any situation where they may be needed.
Dedicate Time on a Regular Basis
We all know that procrastination just leads to more problems and stress down the road. When you plan your week, or business quarter out, be sure to include time to organize your finances. Whether you spend 15 minutes every week, or schedule a phone call with your business accountant bi-weekly, staying on top of your expenses and understanding the state of your business’s financial health can only help set you up for success. Taking even a few weeks off from your finances can prove detrimental to your business goals. Though losing track can be easy and you may tell yourself you can push it off another day or week, this opens the door to poor budgeting, lacking understanding of your cash flow and potential debt.
Conclusion | Organize Your Business Finances
Understanding your finances is imperative to understanding the business you’re in and the market you cater to. A business owner that isn’t informed on his company’s financial health is susceptible to mismanaging money, future roadblocks, and tough decisions. Taking small steps now, and educating yourself on the nuances of your business finances and organization will only help your business reach the goals you have in place.