In today’s competitive business world, it can be difficult to keep all of your finances in order. The modern business owner’s head has to stay on a swivel in order to be successful. With so many elements of the business to worry about, it can be easy to miss important financial details. That’s why so many business owners choose to outsource the position of an accountant or financial manager. However, there are a variety of ways you can save money and keep your finances in order without the need of outside help.
Understand Financial Statements
There are four essential details you need to pay attention to on financial statements: cash flow, income estimate, balance sheets, and shareholders’ equity. The cash flow statement will break down the operative activities, and monetary in/outflow. Balance sheets provide information on your business’s assets, liabilities and shareholder equity. Income statements reveal revenue earned within a specific time frame such as quarterly and yearly. Shareholder equity is the monetary value of and stake your shareholders have in your company.
Taxes
Staying on top of your taxes needs to be a top priority when it comes to running your business. One mishap or slip-up could result in a Notice to Audit letter from the IRS. If and when your business receives a notice from the IRS, you shouldn’t hesitate to seek out professional tax relief help. To avoid any trouble, take the time to review any and all documents that you file with the IRS in order to ensure accuracy. Even if you use a third party to file your taxes, mistakes can be made by your filer if they aren’t provided the correct information by someone in your company.
Separate Your Personal Finances from Your Business Finances
It might seem like a no-brainer, but many business owners get into serious legal trouble after failing to keep their personal and business finances separate. One of the easiest ways to keep out of trouble with the IRS or the law is to pay yourself a salary from your company’s earnings. While you might have to make two separate filings, one for you and one for your business, it’s worth the hassle to avoid a violation or jail time.
Cut Costs
Whether you’re running a small business or a large company, there is always a way to run things more efficiently—and for less money. Take the time to analyze the ways in which you could be overspending. If you aren’t already, continually look for new wholesale suppliers who might be offering the essentials your business needs for a significantly discounted rate. Doing so will put you in the advantageous position to renegotiate with your current supplier or switch to a new one.
Allowing your employees to work from home is another great way to reduce your expenses. Not only is it a great incentive to offer to potential hires, but offering a work from home positions could mean a smaller office, and as a result, smaller overhead costs.
Go Digital
If saving the planet isn’t a motivating factor to go paperless, perhaps saving money is. There are a variety of ways in which businesses can ditch paper records and go completely digital. Cloud storage services such as dropbox.com are an incredible resource for any business that handles important documents. Even law offices are using services like Dropbox in order to cut down on storage costs. If your business is paying for file storage, consider picking up a digital scanner to convert all of your older files into digital copies so they can be stored online.
Monitor and Measure Company Performance
No matter the size of your company, it’s vital that you keep tabs on the movement of your money. Continue to compare the performance of current quarters to previous so that you can track progress and estimate trajectories. Doing so will allow you to make informed decisions about your business when it comes to hiring and expanding.
Find an Advisor
There are a handful of retired, successful former business owners who are just itching to share their wisdom and get back in the game. Keep your eyes and ears open in your circle of colleagues and friends for anyone interested in being a financial advisor.
Utilize these helpful business tips and run your business with more efficiency and authority.
