One major important part of running a business is to learn how to effectively manage your finances. If I had to narrow it down, here are the top six tips for effectively managing your business finances.
Choose a specific day to address important financial issues on a weekly basis
When it comes to successfully managing their finances, the biggest issue facing most entrepreneurs is procrastination. That is why I suggest that you choose a specific day to address important financial issues on a weekly basis. This is much easier than going on a 3-day crash to audit a 3-month book.
Use a cloud-based accounting software
While there are numerous accounting apps that you can download, the best way to conveniently manage your accounts is use a cloud-based accounting software. With any cloud-based accounting software, you can access, track and update data from any part of the world and at any time. You can always depend on them because they are easy to use and free from any technical issues.
Hire a bookkeeper
No matter the size of any business, it will still require help. So, as a business owner, seeking for help isn’t a bad idea at all. In terms of financial management, hiring a bookkeeper might be in your best interest. You can start by hiring the bookkeeper on a part-time basis. Are you trying to plan your tax for the next financial year? Or do you need a guide on how to pay for the current year? Hiring an expert may be your best option.
If you are in Melbourne, there are very good bookkeepers in Melbourne. If I had to choose the best among them, I will choose bookkeeperco.com.au. Having used them before, I am seriously awed by their professionalism.
Keep your business and personal finances separate
The first step is to get a business credit card where you will put all expenses related to your business. This way you can easily determine the amount you are spending and be able to keep your expenses in check. I also suggest that you open a business-only savings account. Then, for every profit, you make, transfer or deposit a specific percentage into this savings account. With time you would have a lump sum in this savings account that you can either re-invest into the business or use to pay your business’ tax. More details.
Become financially literate
Financial literacy is one of the best steps to take to properly manage your business finances. If you don’t know already, start with learning how to read financial statements. When you start learning, start with the basic terms – gross income, net income, expenditure, debt, etc. The four most important details in your financial statements are your shareholder’s equity, balance sheet, income, and cash flow.
Any information about your company’s shareholders’ equity, liabilities and assets will be shown on the balance sheet. Information about the revenue earned in a specified timeframe is displayed in the income statement.
Pay your tax monthly
This is more convenient than paying it on a quarterly basis.
Thus, your tax will just be another monthly operating expense, albeit an important one. Click here for more information: http://bookkeeperco.com.au/bookkeeper/