Are rationing words, margins, balance sheets, and finances in general giving you a heart pounding, breathless type of panic attack? Are you having trouble helping your ten year old with basic math equations? Don’t worry. There is no need to hang your head in shame.
After all, you have successfully created your own internet empire and it requires some extraordinary business skills. No one expects you to know how to do everything. If the arduous task of crunching numbers is outside your repertoire of skills, don’t worry. By following a few easy tips, you can keep track of your money and ensure that your business stays on fiscal track.
The first step is implementing the system. Here are some tips that will make tracking your business finances a lot easier.
- Keep your finances separate. You need to separate personal and business finances. This means opening a special bank account for your company.
- Purchase financial software. Choose carefully the bookkeeping program designed to meet your business needs. This will eliminate much of the need for paper, which can get lost or misfiled. It will also allow you to manage your finances more efficiently and create financial reports.
- Develop filing system. You need to design a system to keep your invoices and receipts organized. Remove all scraps of paper from your pockets or wallet each day and store them as needed.
- Make a daily commitment. Take time each day to engage in bookkeeping activities.
Learn some accounting basics
Developing and keeping up with a new bookkeeping system is much easier if you understand some of the basics of bookkeeping. Here are some basic statements you can make once you’ve implemented a new system.
- Balance sheet. This can be generated daily, weekly, monthly, or quarterly and is a list of all of your company’s assets and liabilities. Assets will include items such as cash, inventory, property and company investments. Your business liabilities are items such as money owed, expenses, payroll, and rent. This document is very useful because it gives you an idea of the financial viability of your business.
- Income statement. An income statement, aka “income statement”, calculates your company’s revenue, deducts its expenses, and shows the net profit or loss.
- Cash flow statement. Many businesses fail because of cash flow, so it’s important that you keep track of the money coming in and going out of your business.
It is important that you ask for help with your bookkeeping when you need it. Here are some tips that will help you find support.
- Develop a strong working relationship with your accountant and visit him regularly.
- Ask a bookkeeper to give you lessons on how to use your financial software.
- Take a course on the basic principles of bookkeeping.
- Create a good relationship with your banker and take advantage of their financial advice and knowledge.
- If you don’t have time to keep track of your finances, hire a professional.
The trick to managing your company’s finances is finding a system that works for you and sticking with it. So stop blowing on that paper bag, put away your Xanax, and step away from the window ledge. You can handle your bookkeeping. And if you can’t, there are professionals for that.
What time-saving tricks have helped you handle your company’s books? Is something not working?