Running a business is hard enough, but when you’re trying to run it on your own and keep track of all the financial aspects that come with it, things can get overwhelming very quickly.
Take a look at this list of tips to learn some ways that you can make organizing your affairs a little easier.
There’s no one-size-fits-all system for keeping financial records. Make sure that the system you choose is tailored specifically to your needs and work habits.
Keep Organized Financial Records
Keeping financial records organized might seem like a daunting task, but the small effort to stay on top of your records can help you save time and money in the long run.
Keeping everything in one place can help you track your records more quickly and find the information you need. Good organization will also keep financial documents from being lost or accidentally discarded.
You can choose to keep both physical records and information uploaded on cloud storage.
Many people choose to take their essential papers home, but you should ensure that your household is secure and that there’s no chance of the information becoming lost, damaged, or stolen.
If this isn’t an option for you, consider keeping records in a safe-deposit box at your bank or some other secure location.
Save Money by Tracking Expenses
Using a spreadsheet to log expenses is a great way to stay organized with your expenses and save money.
To get started, you can use an already existing spreadsheet or create one on your computer. Just start tracking expenses in the month that they happen, and you’re well on your way to saving money by identifying potential areas of improvement.
This spreadsheet doesn’t have to be complicated. A simple column for each type of expense, along with a column showing the total spent, is often enough to get started.
Creating this record will make it easy to identify areas where you are spending too much money or are paying unnecessary fees, allowing you to take steps towards correcting these issues.
Set Monthly Reoccurring Bills and Payments
Taking the time each month to go through your bills and payments can save you time, money, and stress. By creating a new statement for each of your regular monthly bills, you’ll save yourself countless hours that will be otherwise spent on bill-paying days.
You’ll also know exactly how much the total is every month, allowing for ease in budgeting ahead of time for any unforeseen expenses.
Setting up automatic bill payments for all of your bills is the simplest way to ensure that you’re never late with a payment, which can lead to extra fees or other problems.
Make sure that these payments are set up as reoccurring payments so that no matter what happens, you can always pay your bills on time.
Don’t Be Afraid to Talk With Others About Finances
Talking with other business owners or leading financial experts like Jacobsen Capital Advisors can be a great way to get solid advice and keep your finances organized. If you find yourself amid a financial dilemma, it might be a good idea to talk to a trusted colleague or accountant about how they might handle the situation.
It’s never a bad idea to discuss your business finances with someone qualified to help you make money decisions, especially if you consider them a friend or mentor.
Plan for Deductible and Non-deductible Items
If you plan for tax-deductible and non-deductible items, as well as depreciation logistics when you’re filing taxes, you’ll save yourself time in the long run. Planning is easy to do when you utilize the services of an accountant or visit the IRS website for more information on current laws. Even some online resources are free to use, making it even easier to plan.
Calculate Profit Margins and Fees
Calculating your profit margins and fees is an integral part of staying organized with your finances. There can be significant differences between the amount you sell something for versus what you might spend on it. Knowing how much money each product will make after paying all the fees and other expenses leads to smarter decisions on what products to buy or put on sale.
Talk With Your CPA About Tax Implications of Transactions
Talking with a tax professional can help you prepare for upcoming tax seasons and learn more about current federal and state tax laws. Staying informed about how different transactions might affect your business taxes is the best way to avoid major financial setbacks due to unpaid taxes.
Your CPA can help you prepare for upcoming tax seasons by helping to plan, as well as provide general advice on financial decisions.
The Bottom Line
Staying organized with your finances is easy to do when you find simple ways to keep track of your money. Whether you choose the method that works best for you depends mainly on what you’re more comfortable with, as well as how much time each month can be dedicated to organizing finances. Most people find that the more they’re able to automate and work less, the better.