Securing your business’s financial future is a big concern for small business owners. You want to make sure that you have items in place to meet your monthly needs and make sure you are financially sound for years to come. So not only do you need a sound business plan and monthly or yearly goals, you need to make sure you have taken into account the many other factors that affect your business’s financial future.
Make sure your business and personal finances are separate
Separating your finances protects your business and personal liability and makes it easier to evaluate your business and personal finances. It will also save a lot of confusion and protect you in the case of an audit. Not only do you want to make sure your bank accounts are separate your credit cards should be as well.
Be aware of the effects of personal debt on your business
As a small business owner your credit is tied into the credit of the business. So it is essential that you have your debt in order if you are ever considering utilizing a line of credit. That means you should take a look at any credit card debt, outstanding student loans and any other debt you many have. If you encounter obstacles with taking care of your outstanding debt you many want to consider financial lenders such as factoring companies, who don’t take your credit into account they look at the credit of your customers when providing you with a line of credit.
Ensure you have accurate financial statements
In order to know the true financial standings of your company accurate financial statements are key. You will also need the information easily accessible and accurate come tax time or when dealing with a financial institution to secure a line of credit.
Bring in experts to help when necessary
It’s always tempting to try and do things on your own to save money, but for some things you might actually save money by bringing in an expert. Some experts to consider consulting for your business include accountants and lawyers. Accountants will have an intimate knowledge of tax laws in their area that will save you money almost every time. An accountant will almost always find more deductions and keep you penalty-free. On that note, the cleaner your records, the fewer billable hours you’ll have to pay, so make sure you’re organized year-round.
There are some matters that you can handle on your own, but you may want to consider consulting a lawyer for any serious litigation or preventative measures such as final looks at key contracts or contract templates or disputes with employees. It is also usually less costly for attorneys to keep you out of trouble than get you out of trouble.
Utilizing software and other technology that makes life easier
When it comes to key areas of your business, you may want to bite the bullet and spend a little money instead of being tempted to take shortcuts to save a little. Computer programs, such as QuickBooks, can help you reduce the likelihood of human error in your bookkeeping and is one of the best ways to ensure that your records stay accurate.
Organization of documents and contacts
Having a system for filing documents and contracts is key to knowing how your business is doing. Whether you choose to keep hard copies in an office and/or use an online server system, such as Google Docs. Making sure you always file things correctly and in a timely manner will not only come in handy when you need to reference something, but you might need the information to make sure you are accurately being paid or billed as well as during tax time or to secure a line of credit with a financial institution.
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