In honor of New Year’s Resolution season, let’s look at the financial health of your small business. The experts at Sidekick want to help by sharing some valuable ways you can stay financially educated and organized now, and for years to come.
Why Managing Business Finances Matters
You’ve likely heard the saying, “Fail to plan, plan to fail.” The same principle applies to managing business finances because doing so ensures you have a more stable financial future and are less likely to fail. As a business owner, you must understand the accounting and financial tasks you need to run your daily operations. Staying organized and managing your business finances also helps you stay compliant with tax recording and payment requirements.
Implement a Billing Strategy
A good billing strategy for your business is one that helps you properly manage payments and invoicing. Managing these processes help you manage your cash flow so you can operate at a financial healthy level each day. But unfortunately every business has a client that consistently invoices or makes payments late. You may need to get creative to help these clients be more timely, such as offering a slight discount (1–2%) if they pay invoices within a set term (10 days, 30 days, etc.).
Software is a valuable tool you can use to help you save time and manage most of these administrative billing tasks. The less time you spend on billing functions, the more time you’ll have for your business.
Automate Beyond Finances
This tip goes beyond what we covered above about using software to manage invoicing. Set up an autopay system for your bills so you never forget a payment, and can alleviate late fees and/or interest charges. Many business credit cards also offer rewards for paying your bill on time.
You can also automate in many other areas of your business to help you reduce paperwork clutter. Create a paperless file system for all the supporting materials for your business. If you have existing hard copies of documents, scan them in and save them to your digital files.
Maintain Good Credit
If you use autopay like mentioned above to ensure your credit card bills are paid on time, you’ll also be promoting a good credit standing for your business. You may want to add insurance and loans to help you build and expand your business, as this will also help improve your credit. Just be sure you aren’t “biting off more than you can chew” by taking out loans with interest rates you can’t afford to repay. Because obviously late and unpaid bills will undo all the good you’ve done to your credit reputation.
Manage Your Expense Receipts
Expense reports are likely one of your least favorite tasks, yet they are crucial to helping you manage your finances, cash flow, and tax requirements. Much like with billing, you can use software that conveniently keeps all of your expenses organized and recorded so you have time to focus on what matters most to you—your business.
Plan Ahead, Spread Out Tax Payments
Every for-profit business in the U.S. is expected to make tax payments throughout the calendar year, typically on a quarterly basis. If you aren’t compliant, you could end up paying fines or even risk being shut down. Many businesses find it’s more manageable to opt to pay taxes on a monthly basis. Overall, if understanding and complying with state and federal tax laws is complicated and takes valuable time away from running your business, consider hiring a tax services professional.
Invest in Future Growth
This tip dovetails the one mentioned earlier about maintaining good credit. As your business develops, set aside money that you can invest in future growth opportunities. From property and equipment to added staffing, this focus and commitment to growth can help add value to your business to keep you successful in the long term.
Plan to Succeed with Sidekick Accounting Services
Let’s face it—there are plenty of business owners who aren’t “numbers people.” That’s why it makes sense to rely on a resource like the Sidekick Accounting team. We get to know your business and work as a seamless financial extension of your team.
Call 414-310-7689 or contact us to set up a complimentary consultation that’s most convenient for you.