Finances can be one of the most complicated parts of running a business. Follow these tips to focus more on your business and less on onerous bookkeeping!
Create a Budget
Just like for personal finances, you need to understand how much money is coming into your business and where your money is going. Your business budget doesn’t have to be complicated but, at a minimum, it needs to forecast income from sales of your product or service and expenses like building leases, payroll and taxes. The more detailed your budget is from the outset, the better a tool it will be to monitor if you are on the right track.
Keep Detailed Records
As a small business owner, keeping detailed records is a must when it comes to managing finances, filing taxes and other bookkeeping matters. Make sure you keep and track allreceipts, payments, statements, invoices, expenses, sales and even miles spent on business travel. Organizing and reviewing records monthly can help avoid losing countless hours (and gaining a headache) at the end of each quarter or at the end of the year. Uploading records to business accounting software like Quickbooks is a great way to manage recordkeeping.
Simplify By Using Electronic Records
Make things easier — and greener — by going digital instead of using paper! Paper records can be messier to sort through, organize and search. By transferring your financial records to electronic records, you can find what you need instantly. Many businesses use digital platforms that integrate with their sales or service processes to automate recordkeeping. Online service platforms like Square or Stripe can connect directly with bookkeeping software to make recordkeeping a breeze. Plus, keeping everything online will reduce your need for physical storage space and save money!
Quickbooks is a commonly used small business financing, bookkeeping and accounting software package. It can help keep things simple by enabling all aspects of accounting to be consolidated on a single platform. For example, Quickbooks can connect with your bank accounts, send invoices, take payments, keep records, balance finances and even ease tax preparation. Quickbooks is ideal for independent contractors and small business owners. (Read How Quickbooks Can Simplify Small Business Finances.)
Separate your Business and Personal Accounts
Whether you are self-employed or have multiple employees, separating your business and personal accounts is a necessity. Without separation, you could be responsible for paying businesses debts with your personal accounts, a potentially disastrous situation. To start this process, apply for an Employer Identification Number (EIN) from the IRS and open a business banking account. This will legitimize your business and help protect your personal assets.
Turn to a Professional
At Gift CPAs, our team is here to help you optimize your finances as you manage and grow your business. We’ve helped countless businesses get off the ground and reach the next level.
To meet with a Gift CPAs professional and get personalized advice about simplifying your business finances, or to learn about our other services, contact us to make an appointment. We look forward to meeting you virtually or at one of our five locations in Harrisburg, Mechanicsburg, Myerstown, Ephrata or Lancaster!