How to Simplify Your Business Finances
There are a lot of aspects to running a business besides the actual running of the business. One major one is keeping track of business finances. This can be a confusing and time-consuming process that has been known to frustrate even the calmest and most experienced business owner.
Here are some tips on simplifying these processes.
Separate Your Accounts
When you first start your business, you may be tempted to keep your own personal funds and your business finances in one account. However, it’s a much better decision to have separate business accounts. Not only does this help you keep everything straight in your own mind, but it makes record keeping easier as well.
The same goes for credit cards. You should have a separate business credit card that you use for business transactions. That way, tracking of business expenses will be more straightforward.
If you establish a clear difference between business and personal finances early on, you’ll be in a better position going forward as your business grows.
Use Software
While it may seem easier to do your accounting and record keeping by hand, consider trading your pen and paper for business or accounting software. A good software program (e.g. QuickBooks) can easily pull in information from bank accounts, update reports automatically, create customized reports as needed, and generally simplify numerous aspects of your business accounting.
When choosing business management software, consider selecting a program that offers a strong mobile app (so you can manage your business finances on the go) and one that backs up to the cloud (so you won’t lose any data if your computer fails).
Keep Good Records
Keeping and storing business documents, receipts, contracts, and other important papers in a neat and organized manner is crucial. If you store them in miscellaneous piles in and around your office, for example, it’s a lot more likely that you’ll misplace something.
Instead, organize your documents in file folders and banker’s boxes so you can easily find them when you need them. You may also want to consider scanning important documents and saving them digitally. Not only will this allow you to back them up (so you’re less likely to lose them) but you’ll also be able to tag and classify them so they’re easier to find.
Automate When Possible
Managing business finances is often time consuming. However, there are several ways to make the process easier on you. One of the best routes to take is to automate as much as possible. Set up preauthorized payments for monthly expenses. This will save you the time of having to manually process payments and you won’t miss a bill.
Software programs can also automatically generate financial statements, invoices, and many reports, so you don’t have to do so yourself. You may even be able to automate payroll.
Hire an Accounting Firm
A knowledgeable accounting firm won’t just add up numbers for you. If you work with a Chartered Professional Accountant, not only will your bookkeeping and accounting processes get done, but you can also get help with creating budgets, financial forecasts, business plans, and more. A CPA can save you time and hassle, allowing you to focus on running your business. Plus, they can help you identify new opportunities to grow your company.
Find out more on how a CPA can help with your business accounting.
