6 Tips for Starting Your Small Business Finances Correctly
Owning a small business comes with many rewards. Not only do you get to be your boss, but you also get to do what makes you happy. Despite the perks of being a small business owner, there are also challenges to overcome. Managing finances is one of the challenging parts of owning a small business. Below are some finance tips to help you ensure your start your finances the right way.
Good Bookkeeping
Always keep a record of your income and expenses to avoid setting yourself up for frustration. Records help you make better choices when drawing your income, paying taxes, and more. You can keep better records with the help of either a free bookkeeping software like Wave or a paid one like QuickBooks. Moreover, ensure your small business has a different checking account. Banks like RBC offer digital business accounts with monthly fees as low as $5 per month.
Make a Budget
Nobody enjoys budgeting. But despite not being fun, this finance tool helps you handle your cash flow responsibly. Your budget highlights your projected earnings and expenses for a month or the year. Knowing what your business needs to spend ahead of time helps you avoid surprises.
Make a Profit and Loss Statement
Tracking your profit helps you stay out of debt. The profit and loss statement must be a monthly exercise. You should also have one for your whole financial year. Tracking profitability for any duration of time is much easier with accounting software.
Cashflow Projection
If you want your business to thrive, you need to avoid cash flow issues. Projections about your cash flow must include your sales forecast, financing, and start-up cost. Also, follow up your estimates with a statement of how much comes in and out of your account monthly.
Get Ready for Taxes
Don’t run your business like tax seasons will never come. Tax season doesn’t need to be a headache if you set up your finances and keep your records as you should from the start. Always do your research to find out which taxes apply to your business.
Benazir Hussain, Owner of AZON Bookkeeping Services Inc.
Hire an Expert
Having to deal with the numbers and your business simultaneously can get overwhelming. You don’t have to cater to what you don’t understand. There are finance experts that cater exclusively to small business finances. Some even niche down to a particular industry. Working with an expert allows you to cut out the guesswork and mental fatigue. At AZON, we offer comprehensive bookkeeping packages and take care of bookkeeping and all your tax filing obligations.
Book a call with us today to discuss how we can help you.
Final Thoughts
All this can sound overwhelming if you’re just getting started with your small business. But don’t let the challenging aspect of finances scare you. Running a small business is one of the most fulfilling things anyone can do.