When you're starting a small business, it can be overwhelming to keep track of all the little details. One of the most important things to keep tabs on, though, is your finances. Unfortunately, this can also be one of the most difficult things to do, especially as your business grows. Here are some tips to help you get and stay organized.
1. Record Your Income and Expenses
It might sound obvious, but it's important to make sure you're accurately tracking the money your business is receiving. This can be as simple as recording sales, but it can quickly get complicated if you're offering a service or anything else that involves contracts with customers. Make sure your business is compliant with ASC 606 in reporting the money you're making on these agreements, and consider getting help to make sure that you're meeting all other requirements for recording revenue. You also need to make sure you're tracking your expenses just as closely as you are your income, as this can help you get tax deductions at the end of the year. To do all of this, it might take a little while to find a system that works for you, but keep working at it. Consider asking fellow entrepreneurs what they use and why they like it. Once you find one, stick with it and make it a part of your everyday routine so that you don't get behind.2. Streamline How You Accept Payment
Just as you need an internal system for tracking your income and expenses, it's important to establish one for accepting payment. This will look different depending on your business model, and you may even have a few ways to do it. Having a method in place will not only make it easier to keep a record of your finances, but it will also help you if you hire employees. Being able to have your workers pick up with the same system you've been using is vital to keeping things consistent and smooth. Plus, having an easy method for your customers will keep them satisfied, which will be a big boost for your bottom line.3. Separate Your Personal and Business Finances
Even if you're running a small startup, having your personal and business finances all in one place can quickly get messy. To help with this, you should consider opening a separate bank account for your company. This will help make it easier to keep track of money coming in and out, as well as to put together your financial reports and taxes. You can get an actual business account if you want, but you can just open another personal account to start out with. If your company continues to grow, though, you'll eventually have to switch over to a business account, so it might be worth saving yourself the trouble and establishing one now. You might also want to look into establishing an LLC in order to completely separate your personal finances from your business's. This will ensure that any legal issues that come up will only affect your business, as well as help you stay compliant with other requirements.4. Revisit Your Finances Regularly
Chances are, you're juggling multiple hats every day within your business. It's all too easy to let your financial systems and records fall by the wayside, especially if you have a good system in place to track them. Make sure you're scheduling regular times to check in and see where you're at. Otherwise you might get blindsided by a missed payment, a dip in sales or a purchase that you thought you could afford but can't. If you find yourself struggling to handle your business's finances, you may want to consider hiring an accountant to help you stay on track, whether they work for you full-time or as a consultant.While keeping track of your business's finances can be difficult, it is doable with some planning and organization. Put in the effort to create systems to keep you on track and ask for help when you need it. The work will be worth it in the end.
