In one of our latest blog posts we talked about cleaning up your personal finances. Now that we've made it through tax season, it's a smart idea to evaluate your business financial picture as well. Here are some tips on how to appraise your company's financial health, and make improvements for its future:
8 Business Finance Tips:
- Know Where It All Goes: There's no way to create a budget and successfully manage your business finances if you don't know where your money is going and coming from. Take the time to thoughtfully review your expenses, income and other purchases before making changes or updating your budget. If necessary, collect data for a few months so that you're working with the best information available.
- Stay Current: Once you've worked through the details, implement a routine for meeting basic financial obligations on a daily or weekly basis. Process bills and payments on a timely schedule, and have a plan for following up on unpaid invoices. Always review your bank statements and receipts so that you have a clear understanding of where things stand.
- Follow the Money: Reviewing your finances isn't just about budgeting and staying on top of obligations; it can also be a great way to assess which aspects of your business are the most lucrative. Which clients are paying the most? Which services are yielding the highest rates? Use your data to decide how you can better spend your time and energy to get maximum results.
- Call a Professional: There are not many businesses who couldn't benefit from the assistance of an accountant or financial advisor. Make sure you're getting things right by calling in an expert who knows their stuff.
- Create a Tracking System: Tax season is often a reminder that there are many deductions you could be taking if you had only remembered to keep track. In the new fiscal year, resolve to stay on top of business expenditures and other expenses that will save you money next spring.
- Separate Business and Personal Finances: No matter your company's size, keeping personal and business finances separate is an absolute must. Not only is it important for tax and liability purposes; it will help you to maintain a more accurate picture of how your business is really doing.
- Save for Success: Even minor issues like a piece of broken equipment or an unexpected expense can have major effects on a small business if they interrupt your cash flow. Plan for emergencies by setting aside a predetermined amount each month, so that these inevitable obstacles don't become insurmountable.
- Don't Forget to Pay Yourself: If you're a small business owner, chances are you've sacrificed a lot to get your company up and running. It's important to value your own contribution and to compensate yourself for a job well done.
For any business insurance questions, call or contact Litaker Insurance today.