Every business needs to keep up with its finances, but it can be a challenge. Despite the best efforts of some businesses, expenses always seem to exceed income. One way that many businesses try to manage this is by keeping track of every expense and incoming revenue in order to have a clear idea of where they stand financially at any given time. There are many tips that may assist you in managing your money and in this article, we will go through some of them.
Write down all of your business’s expenses on a daily basis
It’s simple but effective. Every time you spend money, whether it is for inventory or equipment, write it down somewhere. This way you can budget for certain items and see where the most common expenditures are coming from. This also helps make sure that everything leaves the company as revenue at some point. Always record your expenses to see where they’re coming from and what has been spent so far on certain projects or products before making any financial decisions.
By tracking all of your expenses in one place (i.e., Excel worksheet or Google spreadsheet), you compare how much money is going out and coming in (on a monthly basis), and determine if your business is on track to make its projected revenue. If you don’t want to bother with this you can always hire a bookkeeper. If you happen to be in Australia, Perth based advisory offices can help you out. They have the necessary skills and expertise to assist you.
Get everything into the cloud
While it may seem cumbersome, transferring all of your data into the cloud can help save time and energy. One such service that many people prefer is Mint.com (a free resource for businesses as well as individuals).
The biggest benefit of doing this is that you can easily access all of your expenses from virtually anywhere—as long as you have an internet connection. This makes it easier for those who travel frequently or work remotely to stay more on top of their company’s finances than they would otherwise be able to do via spreadsheets and other traditional methods. It also allows for access even if your computer crashes, which means that you don’t have to worry about losing any information.
By transferring all of your data into the cloud, you can do many things: make sure that expenses are tracked and monitored, stay up-to-date on company revenue, assess financial performance each month, and monitor where your money is going. Your business will be able to better manage its finances and make informed decisions based on this data by using a solution such as Mint.com from inception to finish.
It’s also a good idea to keep copies of receipts in case anything needs to be verified later on.
Keep track of payroll hours for easier tax preparation
Another great way to simplify tax preparation is to keep track of how much time each employee spends on the job. Keeping detailed records of hours worked for a variety of purposes, such as meeting with clients and conducting research, can help you better determine what their taxable income should be.
By tracking payroll hours in this way, you will have a clear indication of exactly how much money was earned by each person working at your company. If you work with several people who do similar jobs but make different amounts, this information makes it easier to calculate taxes owed, etc., since nobody would be paying more or less tax than they actually owe based on their position within the company.
In addition to helping you ensure that all taxes are paid correctly and in accordance with government regulations, keeping a record of payroll hours in the cloud can help you avoid any potential tax-related penalties.
Set aside time to meet with an accountant or financial advisor periodically
Professional advisors might not be able to tell you how your business should be run, but they do understand the ins and outs of creating finances for a company. By having them review all of your financial statements on a periodic basis, you ensure that there are no costly mistakes that could interrupt cash flow or lead to other problems.
And if they find anything that looks suspicious or incorrect, it will give them the chance to clear up what might seem like small errors quickly before they get out of hand. Besides providing valuable insight into current performance (i.e., monthly revenue vs expenses), a meeting with a professional advisor can also give you the opportunity to seek advice on future plans, how much cash should be saved for emergencies and other necessary expenses, etc.
A meeting can take from around an hour or so up to several hours depending on how complicated your finances are and what needs to be discussed. It’s a lot easier than tracking down all of this information yourself—and potentially overlooking something that could have serious repercussions for your business—by going through everything one by one while trying to balance other responsibilities at the same time.
Set up an automatic payment plan
If there are any bills that your company regularly pays each month, consider setting up an automatic payment plan so you don’t have to worry about forgetting when they’re due. It can be tedious having to locate which invoices need to be paid every time it’s time to make a deposit or pay outstanding expenses. You can also have an expense report software to help you track your expenses and save money on late fees and any other penalties that might come with missing the deadline for monthly payments.
With this method, you only need to do the work of signing up once. Afterward, all that needs to happen is to keep track of when your next “auto-payment date” is coming up so you know what needs to be paid then rather than keeping track of each individual bill. Since some bills change every month, you will need to update the information on file about which bills are paid automatically and when. This can make things a lot easier, especially if you aren’t great at remembering everything on your own.
By utilizing a variety of modern solutions, managing your business’ finances becomes a lot simpler and more straightforward than it once was. With just these simple steps, you can easily keep your company’s finances under control and running smoothly.
About the Author
Zeke Gavin is a freelance financial planner who aims to educate the younger generation and equip them with fundamental financial knowledge to help them make smart decisions on where to invest their money.