You have started your own business and are excited to see how far it can go. You may still be working a full-time job as you get this business off the ground and may only be able to dedicate yourself to it part-time. Still, it’s yours and you want it to be successful. According to CashMoneyLife.com, one of the questions most frequently asked by small business owners is how to manage their business finances. Mashable.com says that the trick is to take the time to organize your financial records and develop a system for keeping them organized.
Shelter Your Personal Finances
Yes, you’re starting out small, but with any luck you will eventually grow. If your business is not incorporated, consider doing so or forming an LLC to shelter you from some of the financial risks you may face and to protect your business liabilities from spilling over to your personal finances.
Separate Business and Personal Finances
It is particularly easy to mix the two when you are running a small business. If you have not already done so, set up a checking and savings account to be used only for business purposes. Make sure to have a clear way to keep track of your business expenditures, like using only a debit card tied to your business account. Put approximately of 25 percent of each payment for goods or services you receive into the business savings account. You will need this money to pay taxes at the end of the year.
Track Your Finances Like the Big Guys
Finance software is a must for medium and large-sized businesses. The days of keeping receipts in shoe boxes and filing each transaction away separately are far behind them. No matter how early you are in the process of building your business, do yourself the favor of investing in finance software. A program like EasyStart from Intuit is built specifically for the small business owner and allows you to neatly organize expenditures, income earned, and any other financial matters right on your computer.
Organize Hard Copies
You will still need a place to keep paperwork and receipts that accumulate throughout the year, says Dummies.com. Like any other organizational project, it is easiest if you create a system. Make a separate file for everything you will need, so that you can quickly find whatever you’re looking for. If possible, purchase a file cabinet and create files for each distinct part of your business. You will need files for:
- Accounting and bookkeeping records.
- Bank records.
- Contracts, including leases and purchase agreements.
- Intellectual property, such as trademark applications and patents.
- Marketing material, like brochures and coupons.
- Permits and licenses.
- Standard forms, such as purchase orders and employment applications.
- Correspondence.
- Employee records.
Set 15 Minutes Aside
You should take 15 minutes each week to organize your business finances. This short update will give you a clear view of where you are, how your finances are fairing, and if you need to make changes to move things in the right direction.