4 Keys For A Financially Sound Small Business
Posted by: Brookside Admin
Small to medium business owners are forced to wear many hats in order to keep their operations running smoothly. That often means that you're in charge of finances and the accounting department, as well as overseeing the rest of your business. If mistakes are made, your finances could doom your business faster than anything else. So, call us for help before there's a crisis, and follow these vital tips for financial stability.
Division of Business and Personal Accounts
When you're just starting out, it can be tempting to pay for certain items out of your personal account, rather than starting a business account before you have anything to put in there. But, doing so muddies up your finances. It's difficult to tell whether your business is truly making money if you're paying for some expenses from your own pocket. This also makes tax time more difficult when some business expenses that could have been written off were paid for by your personal account. If you're outsourcing accounting tasks, you'll get more bang for your buck if your accountant only has to look at your business accounts, rather than having them manage your personal accounts as well.
Keep Track of Every Business Expense
Did you have a quick lunch with a client? Or buy some pens while you were out? Every expense needs a receipt and an entry in your books. Remeber that supporting the bottom line has two sides, increase revenue and limiting expenses. It's impossible to adequately limit your expenses if some are not being tracked, even if it's just some small costs here and there. By tracking every single business expense, you'll quickly learn where opportunities to save exist, as well as opportunities for tax rebates.
Automate with Accounting Software
It's unlikely that you have the time to handle your business's books by hand. And, if you're not an accountant by trade, you probably also don't have the necessary knowledge. Accounting software can help make keeping your books more efficient, and help guide you to correctly tracking expenses, invoices, and more. Be sure to evaluate not only the features and support available with new accounting software, but also its ability to grow as your business grows. At Brown Kinion and Company, we recommend Quickbooks and have a Quickbooks Pro Advisor on staff to help you implement and manage your software.
Keep Invoicing and Payments Up To Date
Signing new business and selling your products and services is important, but it's meaningless if your invoicing system is flawed. You need to be getting paid on time for your services in order to support your bottom line. This is likely another area you don't have time to handle without the help of automated software. Quickbooks can help you get invoices out on time, and help you keep track of what's been paid. Outstanding debts and a lack of cash flow can doom a business the same way extensive expenses can.
If you need help with your business's financing, call the CPAs at Brown Kinion and Company.