Being a business owner is undoubtedly one of the most demanding jobs on the planet. As a business owner, you will have to keep a close eye on the financial side of your company. Nearly 30 percent of the companies that go out of business each year do so because of a lack of capital.
Failing to focus on keeping your business financially healthy can have very negative consequences. With a bit of help and the right tools, managing money should be much easier. Read below to find out more about managing your small business’s finances.
Good Financial Habits are a Must
Managing your company’s finances is much easier if you have a clear set of guidelines in place. Doing things like paying bills on time is a great financial habit. You also need to make sure invoices are sent to customers promptly. The longer you wait to send out this documentation, the harder it will be to keep your business afloat.
Being a fiscally-responsible business owner should also carry over into your personal life. Having good credit is no accident. Checking your credit report regularly is a great way to find mistakes and get them removed in a hurry. If there are tons of inaccuracies on your credit report, it could lower your score significantly. Are you looking for a way to make disputing errors on your credit report easier? If so, here is a great tool to use for this purpose.
Don’t Forget to Pay Yourself
When first starting a business, you will have to stay on a tight budget. For a while, you may avoid paying yourself to avoid spending too much money. While this may sound like a good idea, it can cause problems in the long run. Neglecting to pay yourself can lead to your personal finances taking a hit.
While you probably need to avoid paying yourself a large salary at first, a regular paycheck is a must. If you are having trouble managing the payroll for your business, then working with an experienced accountant is a good idea. These professionals can make sure every aspect of your payroll is accurate and in accordance with current IRS guidelines.
Develop a Comprehensive Billing Strategy
One of the most important parts of your business is the billing department. Without money flowing in steadily, it will be hard to grow and expand your operation. Instead of neglecting your billing department, work on developing a billing strategy.
Unpaid invoices are one of the main things you need to combat when trying to develop this strategy. If you are having problems with unpaid invoices, getting creative with how you bill specific customers is a must. Clearly laying out how long a customer has to pay a particular invoice is vital. Laying out this information well in advance will allow you to implement penalties without worrying about the customer’s reaction. The time and effort invested in developing a billing strategy will be worth it in the long run.
Spread Out Your Tax Payments
Making quarterly tax payments is something most business owners are familiar with. If you are consistently having problems with making these quarterly payments, then you need to think about making monthly payments instead. Breaking this expense up into smaller payments can help you avoid run-ins with the IRS. Failing to put back the right amount of tax each year can result in a lot of stress being put on your plate, which is why allowing an accountant to help with your business and personal tax filings is a good idea.
Getting Professional Help
Rather than trying to handle every aspect of managing your business finances alone, you need to hire an accountant. With their help, you can focus on other essential tasks.