5 Ways to Stay on Top of Your Business Finances
January 7, 2025
Running a small business is no easy feat. There’s so much to think about! Whether it’s marketing to sales, operations to finance, it can be so hard to keep track of it all. And when you’re conscious of the financial side of it all, it can make it that little bit harder too. Luckily, with the right tips, you can set your small business up for financial success. Let’s dive into it so that you can make positive changes sooner rather than later.
Key Takeaways for Staying on Top of Your Business Finances
- Track Your Finances Regularly: Use spreadsheets or recurring invoice software to monitor income and expenses, helping you make informed financial decisions.
- Save for Taxes: Set aside money each month for taxes to avoid unexpected financial burdens and consult an accountant for accurate estimates.
- Maintain a Separate Business Account: Keep personal and business funds separate to simplify finances and avoid confusion when tracking expenses.
- Create and Stick to a Budget: A clear budget helps you understand what you can afford to spend and enables you to plan for business growth without overspending.
- Be Mindful of Spending: Avoid unnecessary expenses by carefully evaluating purchases and finding cost-effective ways to meet business needs.
- Prioritize Financial Discipline: Always question if a cost is essential and look for cheaper alternatives to manage resources efficiently.
- Financial Awareness Ensures Long-Term Success: Monitoring and controlling your financial practices ensures a strong foundation for your business’s growth and sustainability.
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START NOWTrack your finances
It’s all too easy to guesstimate the money you have made with your business, and you’d be surprised at how many entrepreneurs don’t properly track their finances. Firstly, you need to know where money is coming from and where it’s going. You should begin by setting up a spreadsheet to keep track of these things, and you can make your life easier when it comes to billing by using recurring invoice software. That way, you can easily track your income and expenses for each month, giving you a better overview of how well your business is doing financially. Not only that, you’ll have the ability to make better financial decisions when it comes to your business.
Put money away for taxes
Being self-employed means you’re responsible for paying your own taxes. This is often an unwelcome surprise to new entrepreneurs that are used to their taxes coming out of their wages each month. However, it’s part and parcel of being self-employed, so save yourself a large bull and put money away each month for your taxes. If you’re worried about not putting enough money away, speak with an accountant - they’ll be able to help work out approximately how much you’ll be paying.
Have a separate account for your business
This one may sound a little obvious, but you’d be surprised at how many entrepreneurs mix their personal and business money. Things can quickly become complicated when the two are mixed, especially when you’re trying to be conscious of how much you’re spending. Open a business account and keep all of your earnings from your business completely separate.
Create and stick to a budget
You understandably want to continuously improve your business, but it’s important to know when you can actually afford it. That’s why making a budget and vigilantly sticking to it is important. You’ll be able to see exactly what you’re able to spend to improve your business.
Be careful with your spending
It’s easy to overspend in this day and age. And, if you’re offering to pay for food and travel expenses with potential clients, the cost can soon rack up. While you want to impress potential clients or business partners, you don’t want to make yourself bankrupt in the process. When it comes to spending, really think hard about whether the cost is worth it. Could you do things in a cheaper way? Is that purchase really necessary? Asking yourself questions like these every time you pull out your business card will save you lots of money in the long run.
