Starting a new business is exciting, especially if it’s something you feel passionate about and have dreamed about for years. While managing your business finances is less exciting, it’s something you must do nonetheless. Below are 10 tips to help manage your business finances well from the start.
Maintain separate banking, credit, and loan accounts for personal and business use.
You will need to do this immediately if you plan to incorporate your business. Separating your accounts will also make it much easier to file both your individual and business tax returns.
Accept multiple forms of payment.
In a competitive business culture, you could lose customers when you don’t accept the form of payment they wish to use. In addition to the standard cash, debit, and credit cards, consider adding online options such as PayPal and electronic funds transfers.
Purchase a bookkeeping software program.
Most new small business owners can’t afford to hire an accountant right away. It’s easy to keep up with your taxes and get your company’s big financial picture by investing in a user-friendly bookkeeping program for beginners.
Accept payments on the go.
Today’s small businesses are often mobile ones. You can earn more revenue by accepting payments with a mobile phone app. These apps also allow you to send payments, making it simple to track your business finances wherever you go.
Have a professional create your contracts and payment terms.
One of the most stressful things about operating a business is customers who pay late. It’s essential to work with a lawyer or accountant to draw up legally binding contracts and payment terms to avoid this scenario. The documentation should also state specific consequences for late payments.
Frequently monitor your accounts.
You should always know what’s happening with any type of business capital you own, including cash. This gives you the insight you need to create a budget.
Work with a consultant for tax planning.
You will need to pay a variety of taxes as a small business owner. Unfortunately, it’s common for new business owners to pay more taxes than necessary because they’re unaware of deductions or the most advantageous ways to manage their money.
Track business mileage.
If you use one car for both business and personal reasons, you can claim a per-mile deduction for business use. You can track it manually or use a mileage-tracking application.
Invest in financial dashboard software.
Several companies sell software that allows business owners to create a customized financial dashboard. You can see features such as your business cash flow, gross profit margin, net profit margin, and several others.
Work with a small business consultant.
Starting a new business is exciting and overwhelming at the same time. Meeting one-on-one with an advisor will ensure that you don’t forget any steps and that your business will get off on the best financial footing.
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