In business, being constantly busy is good. But often this pace can add to financial disorganization.
Get your business’ financial house in order with these easy tips:
• Never mix personal and business expenses.
• Organize all financial records. Create specific file folders for POs, bills, bank statements, etc. Every financial record that impacts your business should be properly filed and easy to retrieve.
• List in detail every fixed business expense. Salaries, mortgage/rent, equipment payments, insurance – and include the amount due and the due date for each monthly payment. Then, record weekly/monthly sales and monitor for any trends. This will help you make sure to put enough aside to meet regular obligations, and help you see where adjustments can or need to be made based on business.
• Make a list of all non-fixed costs. This should include discretionary spending – including entertainment or business meals, non-essential tools/equipment, non-essential product purchases, etc. Track these closely for a couple of months, and you quickly see where money can be saved.
• Set up a direct deposit savings account for your business. This forces you to save money each month. Start small if you have to, but this rainy day fund could come in handy if business turns sour.
Better organization means better control. You don’t have to work on the cheap, but if you don’t know what you’re spending, every expense could be an extravagance.