5 Financial Tips For Small Businesses

shutterstock_315105971Running a small business is no easy feat so you want to make sure you dot the i’s and cross the t’s to make everything run smoothly. Cutting corners never got anyone anywhere and that’s especially true when it comes to business ownership, as one small mishap can sink the ship! With that said, business finances require a fine attention to detail and Randall Dang, professional accountant, has some tips to have you tackle your finances.

1. Keep Things Separate

It sure can be tempting to use the business credit card or bank account to make small personal purchases and sure, you have the intentions of paying that personal expenditure back, but don’t do it. Keep all purchases separate and only use the business accounts for business related expenses. Not only is the personal use of business accounts a bad habit, but it can make things really complicated because you need detailed records to account for business transactions. Save yourself from the headaches down the road when it comes time to sort through the expenses and avoid the business account for personal purchases.

2. Hire A Professional

Unless you are a tax law expert or went to school for accounting, it’s a good idea to hire a professional accountant. All the laws governing businesses can become overwhelming to the average owner. According to Randall Dang, business owners will automatically save time and money when they allow an accountant to handle their finances. They have intimate knowledge about tax laws, bookkeeping, tax deductions and just about everything else related to business finances.

3. Update Yourself

At the end of each week, set aside about 15 minutes of your time to review and organize your finances. You’ll gain incredible amounts of insight that’ll help you make more informed financial decisions on a daily basis. It might even help you identify any strange activity going on that you can put a stop to if necessary. This 15-minute review can also help prepare your business for tax time because you’ll have a fresh inkling of where everything stands financially.

4. Track Labor Spending

It should go without saying that you need to properly track your biggest expense – labor. Whether you are paying for a full house of employees or you are the only one on payroll, it’s a great idea to track the costs associated with labor like benefits, vacation, perks, etc. By double checking the budget you have for labor, you may find that you have some extra money to incentivize your employees, which would boost their work ethic. On the other hand, you may notice that you are over budget and need to find ways to bring in more money to cover the labor costs.

5. Track Invoices & Payments

Regardless of the product or services you are selling, you need to make sure your business is getting paid for them. That means you need to track invoices and customer payments on a weekly basis – at the minimum. If you fail to properly track these money-making processes, you may find yourself in a heated mess later down the road. Take note of which customers pay late and which ones are difficult to collect from so you can keep a watchful eye on those important accounts.