5 Ways to Simplify Your Business Finances
Simplifying Your Business Taxes and Financial Tasks
As a business owner, you want to focus on getting and keeping customers, but don't forget the financial side of your business. If you are a solo business owner without a staff, you may find it difficult to find time to deal with the financial work. But don't wait until tax time to find yourself in over your head with paperwork. Here are some ways you can simplify those tax and financial tasks, to keep your business running smoothly and make it easier at tax time.
Simplifying your business' finance is all about (a) creating habits and ways of taking care of financial tasks and (b) setting aside time periodically for review and analysis. Here are some tips to help you make your business financial life simpler:
1. Use Online Accounting Software
You can find a range of online software applications. You may be able to use a free software program if you have a very small business. You can pull transactions from your business bank accounts and update transactions automatically. Then you can create customized financial reports and see balances easily. I find this a great time-saver. Look for software that has a mobile app version and customizable reports.
2. Use Reminders and Alerts
I have a specific calendar marked "Business finances" in my Google calendars. I can set up financial reminders for payments and transfers. By setting up your business financial reminders and appointments as a separate calendar, view, or just appointment color, you can view just your financial calendar by itself, so financial tasks don't get lost in the rush of everyday business appointments and reminders.
Try putting alerts on your business checking account to let ensure that you know when the balance goes below a certain amount and when important transactions have been made.
3. Set up a Way to Capture Spending
Find an app that will capture the records for all your business spending outside the office. I'm talking about receipts for meals and entertainment, for travel, for shopping at the office supply store. I take photos of receipts with my phone and put them in Evernote along with a short explanation of the business reason for the purchase.
The longer you wait, the better your chance of forgetting, so try to track spending as close to the point of sale as possible. Take photos with your phone, have a notebook in your phone to record transactions so you don't have to carry pieces of paper around with you. Consider some of these expense tracking apps that might help you keep track of your on-the-go business spending.
4. Automate Bill Pay
I automate all regular bill payments, both business and personal. With credit cards, I automate making the minimum payment, so I don't get late charges. Then, when I do my monthly review, I might make an additional payment if I have the cash. You can easily set up a similar process for your business in a way that works best for you.
5. Set Aside One Time a Month to Do Everything
A monthly review is an essential part of this financial program. Plan on an hour or so every month. A good date would be when you receive your monthly statement for your business checking account. Have a checklist and work through it. Include bank account reconciliation, or at least look through all of your transactions to make sure everything is correct.
The Bottom Line
Once you have your business financial tracking and review system in place, you will find it takes only a little time each month to do the financial review. This process will also help you at tax time as the necessary financial information for your small business tax preparation will be in place.