Ten Tips For Spring Cleaning Your Small Business FinancesSubmitted by Private Client Advisory, Inc. on July 29th, 2016
We are pleased to have pro financial blogger, Jessica Kane, contribute this week. Thanks, Jessica, for your insights!
Small business owners can get into some bad habits when it comes to finances, and those habits show up as problems on the bottom line. Instead of allowing those bad habits to pile up, it is time to do some spring cleaning and get your small business back on track.
When you started the year, you meant well with organizing your finances. But during the course of the year, paperwork and receipts wound up in places they should never be in. You have not been tracking anything right, and now your finances are in disarray.
Make the resolution to spend a little time each day to properly index your expenses and get your paperwork in order. When you stay organized, everything you need is always available during the year and at tax time.
Get the Checkbook Right
You know how much money you have in the company checking account, so you figure there is no need to balance the company checkbook. The company checkbook is just one way you track expenses and keep your finances organized. Sit down with the checkbook for a little while each day and get it organized, and then resolve to keep it that way all year long.
Take Care of Your Receivables
Is it time to sell off some of those really old receivables just to try and salvage something from them? The longer you let receivables sit, the more money they cost you. If you don't have time for collections, then hire someone to do it. If you have receivables that are 120 days or more past due, then consider selling them to bring in some kind of revenue.
Get a Better Grip on Your Bill Paying
You need to implement an organized system for paying your bills and make sure that all of your vendors get the money they have earned. If you are having cash flow problems that are affecting your ability to pay your bills, getting organized is a great first step.
Make Financial Goals
Did your company grow last year? If so, did it grow enough? If you don't know the answer to that question, then you are not running a proactive organization. You need to set financial goals and work to reach those goals to determine if your company is growing as you want it to or not.
Look at New Tools
Are you using that accounting software because it does the job, or because it is all you know? When you have better financial tools, then you can keep better financial records. Now is the time to bring in new tools and get a fresh start on better record-keeping habits.
Stay on Top of Employee Expenses
You haven't seen any excessive expense accounts from your employees, so you are not really paying attention to expenses in general. The problem is that you may be able to cut thousands of dollars off of your regular expenses if you were to spend just a little time each week insisting that your employees record all of their expenses, and limiting what types of expenses your employees are entitled to.
Project Year-End Results
One thing small business owners don't do enough of is projecting their year-end results to see how they are progressing versus their goals. It does not take a long time to project year-end results, but it is a process you can do each month that will help you to see exactly where your financials stand for the year.
Take the Time to Separate Business and Personal Finances
If there is one spring cleaning task small business owners can use to enhance their finances it is to finally separate their personal and business finances. The problems of paying your personal bills should not be dragging down your business finances, and vice-versa.
Make and Keep a Quarterly Appointment with a Tax Expert
A lot of small business owners put together a small shoe box full of receipts and records and drop them off at the tax professional's office in March. If you want to get your finances in order, then make and keep quarterly appointments with your tax professional and get ongoing advice on how to handle your taxes.
With some slight changes in routine, a small business owner can take the steps necessary to clean out their business finances and give their business a financial advantage.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com.