Being a business owner can be as exciting as it is daunting. The never-ending tasks to keep track of and staying ahead of the competition comes down to one integral thing: financial health. But how do you get there?
Consider these four tips for small-business finances.
- Get organized. This may seem obvious, but keeping financial documents organized is a continuous effort. Be sure to create a filing system and label folders accordingly so you can easily access them at a later time. Create folders by categories such as bank records, contracts, invoices and expenses, and so on. Keep both hard and digital copies for archiving purposes, and don’t forget to backup and secure your digital archives.
- Schedule weekly calendar reminders. Now that your files and folders are sorted, schedule time on a weekly basis to go over your finances and paperwork to keep you focused. Setting calendar alerts will help to remind you that it is, yes, financial housekeeping time. Spending 30 minutes to an hour every week will ensure you stay organized, save you time over the long run, and help you gain control over budgets. Remember: Staying on top of paperwork today means more time focusing on other areas of your business.
- Open a bank account and credit card solely for business. For the solo-entrepreneur and beyond, it is important to separate your bank accounts from personal to business. The same applies for credit cards. By doing so, this will help you track your business expenses, build credit and manage cash flow. To boot having separate accounts will make filing your taxes easier and more efficient.
- Get incorporated. Making money? Great. To further separate and protect your finances, go ahead and register as an LLC or S-Corp. The more money you make, the more your personal assets are at risk. An LLC and/or S-Corp status will project your personal assets from any potential business liabilities that might come your way.