One of the many responsibilities of a business owner is to make sure that their business finances are in order. With the number of payable’s, receivables, and other documents small businesses manage throughout the year, it’s important to keep them organized. However, the process of keeping everything organized can take away the time you need to manage your business. To help you make the most of your time, here are four tips to effectively organize your finances.
1. Separate Business and Personal Finances
Many small business owners make the common mistake of mixing business and personal finances. Make sure to keep your business and personal finances separate if you don’t already. Once your business starts generating revenue, set up a checking and savings account for your business. By keeping them separate, you’ll save yourself a lot of time and work come tax season.
2. Track Income
You need to know how much money goes in and out of your business. To keep track of your income, you can use a spreadsheet or download apps and tools to help you organize your finances. If you already use invoicing or bookkeeping software, you can also make use of a tool that specifically tracks your business income. Additionally, tracking your income enables you to closely monitor your business enabling you to spot any fluctuations in your cash flow. If you’re looking to hit a specific business target, you’ll definitely benefit from regularly tracking your income.
3. Audit Expenses
In business, you need to spend money to earn money. Incurring expenses is a part of operating a company, and just like your income, you need to track and audit them. You can track your expenses together with your income. It’s extremely important for small business owners to audit expenses on a regular basis in order to ensure you’re not spending money on unnecessary expenses.
4. Keep and Organize Hard Copies
Technology is slowly shaping the world of business, but many enterprises still have documents and receipts printed on paper. For this reason, business owners need to organize and store paperwork and receipts accumulated throughout the year. It’s easier for you to organize paperwork if you have a system in place. You can make different files for everything you need, such as receipts, contracts, etc. In this way, you’ll be able to find everything you need without having to search through numerous boxes and files.
You can purchase a file cabinet and create separate files for every aspect of your business, such as:
- Accounting and bookkeeping records
- Bank records
- Contracts, including leases and purchase agreements
- Intellectual property, such as trademark applications and patents
- Marketing material, like brochures, coupons, fliers, etc.
- Permits and licenses
- Standard forms, such as invoices, purchase orders and employment applications.
- Employee records
Oakland Business Loans – Small Business Loans for You
By keeping your finances organized, you’ll have a clear view on how your business is doing financially. You will know whether you need to curtail expenses or apply for Oakland business loans. If you need to apply for a small business loan, SMB Compass’s lending experts are ready to answer all your questions.