Starting a business can be challenging, especially when it comes to handling your finances. Unless you’re an experienced bookkeeper, you might never have had the chance to manage so many funds at one time. Unless you’re lucky, you might end up driving your business into the ground. Avoid such a mishap by using the following tips to guide your business’s financial practices.
Creating invoices for every item you sell is essential. Otherwise, you’ll quickly lose track of your transaction and forget how much money you’re owed by customers. You can even consider using an invoice service like Kabbage, which automatically generates and sends invoices to customers who make a purchase. If customers don’t have the funds to pay right away, they can then apply for extra capital to help them pay. This means you’ll get paid faster, while your customers have either six or 12 months to pay it off.
Hire an Accountant for Taxes
Taxes for a business are a lot different from your individual taxes. If you’ve never filed as a business before, it’s essential that you hire professional help when tax season rolls around. A bookkeeper can look over your records, analyze your data, and help you save as much money as possible. Plus, with his or her expertise, you’ll avoid missing any important caveats that could result in major fees.
Find a Local Credit Union
Even businesses with a lot of capital sometimes find themselves stretched for cash. To ensure your chances of getting a loan fast, have the number of a local credit union on speed dial. If you build a good relationship, the credit union might be willing to provide you with frequent small loans on a regular basis. You might have to become a member to reap these benefits, but they are well worth it.
Cut Down Costs
Chances are, there’s something you can do to cut down costs in your business. While you’ll always have to deal with fixed costs, identify your variable costs and see if you can cut back on them. Instead of investing in the latest computer software, see if there’s an open-source alternative. Instead of buying expensive phone plans, rely more on free online calling and video conferencing services.
Keep Personal and Business Expenses Separate
At first, you might be tempted to simply put business and personal expenses on the same credit card. However, this makes it extremely hard to track what you spend and to plan a realistic budget for your business. Always apply for a separate business credit card that you use only for purchases for your company.
Another idea is to create a savings account just for your business, in which you deposit a small amount of each payment you receive. After a while, you’ll build up a sizable sum that you can use to pay taxes or invest in new technologies.
With these tips in mind, you can keep your business financially healthy. By accurately keeping track of the money you have on hand, you’ll be able to make better decisions that will lead your company to success.