4 Tips for Managing Business Finances
4 Tips for Managing Business Finances
One of my passions is helping women entrepreneurs learn to manage their businesses finances effectively. The good news is that you do not need to be a financial expert to handle the financial side of your business well! Here are four tips to help increase your financial savviness so that you can focus confidently on your business.
1. Create a budget – Create a budget for what you think your sales AND spending will be – This is important because it provides a visual of what you want your sales goals to be as well as where your spending limits should be. The budget does not have to be a scientific model – a high level approach will do if you are not able to plan in a lot of detail. It is then important that you check in on your budget during the month. Ask yourself questions like ‘How are my actual sales compared to my budget?’ and ‘Am I spending more than I indicated that I would spend this month so far?’ At the end of the month, you can use the information that you tracked to help create your budget for the following month!
2. Open a separate bank account or a business credit card for business spending – You should track your business expenses separately from your personal expenses for several reasons:
a. Better tax deduction tracking
b. Provides supportable details if the IRS ever decides to audit your business.
c. Provides specific spending details that you can use to budget your month to month expenses
3. Keep all receipts and file them by spending category – doing this will help you during tax time when you need to itemize your business expenses. Categories that you can use when filing your spending as follows: office supplies, travel expenses, postage, advertising, etc. When it is time to file taxes, you can take your receipts to your tax accountant, filed by category, and she will love you for that!
4. Limit your spending until you have grown your business – Don’t get head over heels in spending money to run your business right away. If you are not entertaining customers or selling a large inventory of products, you may not need to rent office space right away. Consider how you can assist your customers creatively without spending the extra money. Also, do not purchase equipment or extra supplies until you absolutely need it. Really think about what your needs and priorities are before you buy items so that you are pouring your money into the right places.
Would you like more tips on managing your business finances? If so, contact me at tamicagoode@goodeccs.com with your questions.