When you run your own business, you have to take on many roles. As well as building your company from the ground up and overseeing operations, you’ll be in charge of marketing, sales, HR, and finance. In the early stages, your budget will be limited, and there’s a good chance you won’t be able to employ a dedicated staff member to take care of some of these important tasks, so it’s a good idea to learn how to take charge of the bookkeeping yourself. But how can you expect to manage your small business finances if you have no expertise or qualifications in that area? All it would take is one simple error and you might end with dwindling profits, legal action, or an unfriendly visit from the IRS. But so many small-business owners successfully manage their accounts without trouble. And with a few simple tricks and strategies, you can, too. Here are four tips to help you:
Create a business plan
One of the most common pitfalls new business owners fall into is not having a plan. A solid business plan outlines your goals for the business, and the strategies you will employ to get there. It will also detail your budget and projected costs, enabling you to keep track of your finances every step of the way. This will help you avoid overspending and ensure you don’t stretch yourself beyond your means. By creating a comprehensive business plan and budget, you will be more likely to retain a healthy financial position.
Invest in accounting software
It might be cheaper and easier to manage your finances with a Microsoft Excel spreadsheet, but this isn’t the best long-term strategy. For one thing, it’s not scalable. While it might be a convenient solution in the beginning, as your business grows it will become harder and harder to manage. Greater cash flow, changing tax status, and a growing payroll will make your Excel spreadsheet way too complicated for one person to handle and it will take up all the time you’ll spend working on the business. A good bookkeeping program can grow with your business and frees up your time to run the company. It will be more accurate and reliable than your own brain, and you can sit back and let it take care of your finances. I currently use QuickBooks for my business expenses.
Take a bookkeeping course
If you’re concerned you aren’t experienced or qualified enough to manage your business finances, it might be worth getting an online certification. There are loads of free online bookkeeping courses that will tell you everything you need to know about being an accountant for your business.
If you have the budget for it, the most reliable and convenient way to manage your finances is to outsource them to a professional accountant. For a fee, they will be able to take charge of all your accounts, as well as helping you spot potential opportunities to save or make money. Although this is the costliest solution, the benefits will often outweigh the expense.