It can feel overwhelming to think about running your business. Keeping track of all the different expenses, revenue streams, and accounts is a challenge. Fortunately, it doesn’t have to be. Running a business is an essential part of today’s modern world. Businesses are required to operate as efficiently as possible in order to stay profitable and continue growing. Achieving these goals requires that you take control of your financials from the very beginning so that they don’t get out of hand as soon as problems arise or ideas for new ventures occur. In this article we’ll explore 7 tips you should implement immediately to ensure your finances are in good hands moving forward:
Track Your Money From the Beginning
No matter how much time you’ve spent researching a business idea or preparing to start a new venture, it can be difficult to visualize all the actions necessary to bring it to fruition. Taking the time to track your money from the beginning will help put your financials in perspective and prevent any potential problems before they arise. While it’s certainly not necessary to track your funds as soon as you’ve received them for your business, it is especially beneficial to start this process as soon as you decide to start a new venture. You’ll be able to see exactly how much money you have at any given time and track the sources of that revenue.
Be Accountable With Your Employees
Keeping track of your finances and setting aside money for taxes can be challenging, but it is even more challenging when you don’t keep track of money that’s coming in. Employees are responsible for Social Security and Medicare taxes, and if you don’t have those taxes accounted for, you’ll be on the hook for that money. If you don’t keep track of FICA taxes and you hire employees, you’ll have to pay them all a 50% employee share of Social Security, Medicare, and FICA taxes. Keeping track of your finances and being accountable with your employees is especially important if you start a new venture. If you don’t track your money and you pay employees without tracking their pay, you may be liable for paying over $3,000 in taxes to every employee.
Develop Good Business Relationships
Business relationships are important for a variety of reasons. They can help you increase your revenue, promote your products and services, provide you with office space and other resources, and more. Developing good relationships with your vendors is especially important for your business finances. Most companies will require you to have good relationships with vendors in order to receive favorable terms for whatever you’re purchasing. Good vendor relationships can also help you save significant money on taxes. For example, on paper, if you’re purchasing items such as computers and office supplies, you’re likely receiving a significant tax deduction. That deduction, however, is only worth so much. The more expensive the item is, the less it will help you reduce your taxes. A good business relationship can help you manage your expenses so that you’re not spending more than you need to.
Set Up Automatic Payments
A key financial practice that will help you stay on top of your finances is setting up automatic payments. Automatic payments are especially useful if you’re a sole proprietor. In this case, your business account will be your only source of income for the most part. Automatic payments can help you save time and manage your finances. For example, if you’re a business owner who has to run back and forth between your office and home, you may find that you’re spending more time trying to manage your money than you should be. From the beginning, consider setting up an automatic payment from your business account to a savings account, so that you don’t have to worry about it as much.
Take Advantage of Every Source of Revenue
There are many sources of revenue when it comes to starting a new business, and one of them should be to take advantage of every source of revenue. As soon as you start a new venture, look into ways you might be able to generate income. There are many options you might not have considered before. One thing to keep in mind, though, is that generating revenue is not the same thing as generating profit. Although revenue is important, a business’s true success will be measured by whether or not it is profitable. When it comes to generating revenue, don’t be afraid to be creative. Many businesses are built around creative approaches to generating revenue.
Stay Organized and Accurate
Keeping track of your finances and being accurate with your books is essential for the long-term success of any business. Keeping track of your finances will help prevent you from overspending because you didn’t track your expenses. Being accurate with your books will help you stay organized and make sure you’re accurate with your revenue. If you don’t keep track of your finances and you make an error on your books, you’re likely to overspend in the short term and run into financial problems in the long term. With this in mind, it’s important that you keep track of your finances from the beginning. You should always make it a priority to be as accurate as possible with your finances.
Devise a Plan for Emergencies
Every business is subject to emergencies at some point, but this doesn’t mean that you should just hope for the best. Instead, learn how to identify and respond to emergencies as soon as they arise. While you should always try to plan for potential emergencies, you should also consider how your business might react if there is an emergency. If a fire breaks out at your office or your water main breaks, you’ll need to have a plan in place to get things back on track. There are a number of ways that you can help yourself if an emergency arises. For example, you should always have a plan in place for helping employees get to their next job if they are unable to get there on their own. You should also have a plan for helping customers get their next shipment if they are unable to deliver it themselves.
Wrapping up
Running a successful business can be challenging, but it doesn’t have to be overwhelming. Taking the time to implement these tips from the beginning will help make your finances easier to manage, and it will prevent any potential problems before they arise.