If you find it difficult to keep track of your finances quickly and easily – or even at all – then time spent overhauling or at least refining your admin will pay dividends. At any given time, you’ll know your financial position accurately and easily tell if your business is on track to meet your objectives.
Good financial admin and using tech that can help – such as computerized accounting systems to print paperwork and generally save time – will let you manage finances in the most efficient manner possible.
Some aspects to consider:
Separate Personal and Business Finances
If you run a smaller business then you may be mixing personal and business finances such as in, say, using the same credit card.
It’s advisable to fully separate the two as it makes keeping tabs on items such as expenses easier and will help make it easier for you, your accountant or other financial professional such as tax advisor to prepare your accounts for tax assessment.
A credit card solely for business use makes sense as it can, through your statement, keep an itemized list of how much has been spent each month and make it convenient to make purchases. Ensure you pay if off each month to avoid interest and charges.
Simple Filing System
Setting up a simple filing system to compartmentalize your documents is a very worthwhile time saver and helps avoid the frustration of searching for that important receipt or financial document.
Efficient filing will also help when you need to lay your hands on and round up certain documents when the time comes to prepare your tax affairs.
Keep invoices to customers accurately filed, group receipts together, and get into the habit of organizing them by type in envelopes kept in a ‘receipts’ file or similar as opposed to having to wade through a mound of paper when tax time looms.
Draw up a Budget
Assuming you made a business plan at some point, you should use the financial forecast part of this to create a budget to enable you to keep on track financially.
A regularly maintained budget isn’t just to keep tabs on every last expense, but to help you make informed decisions such as whether to invest more in some area or reduce expenditure in the light of your current financial position.
Review Finances Regularly
It’s easy to neglect financial admin when other matters take up time, but it’s worth spending small periods each week or maybe each day if possible. Reviewing your budget and doing a bit of filing regularly will help you keep on top of your business finances and abreast of how you’re faring.
Hire a Professional
If you don’t already, then hiring professional financial help in the form of an accountant, tax advisor or even a bookkeeper can help considerably in keeping financial affairs in order.
It’s still very important though to keep things organized yourself in the ways discussed above; presenting paperwork and other material to your tax advisor or accountant makes it easier for them and may reduce their fees to you as they’re spending less time sifting through disorganized materials.
Time Well Spent
Organizing your financial admin is well worth the time spent to enable you to work more efficiently and keep track of your business’s financial position. Once you have a reliable system and keep on top of it, it need only take a short amount of time per week to maintain it and reap the benefits.