Starting one’s own business can be one of the most exciting and daunting experience. Many times entrepreneurs get too wrapped up in planning their product/ service, marketing and advertising. This makes them forget the most important part of any new venture, the books! Every entrepreneur isn’t an account man and every accountant won’t be an entrepreneur. Though having both sides is equally important. Most new businesses fail in the short term because their finances haven’t been handled properly. Mismanagement of income and its outflow can cause a good business model to fail when it practically hits the market. Here are a few suggestions to save you the trouble of losing lots of money.
Keeping your book in order
Although many small business owners might think they are ready to head all departments of their business but more often than not they need the help. In order to avoid errors that lead to higher costs in the future it is smart to either hire a bookkeeper or use an accounting software. If you feel that you do not have enough funds in the beginning, hire a freelancer. Freelance accountants toowoomba will keep your books in order and won’t be on your payroll permanently. If not spend your time learning a good accounting software that automatically keeps track of all your transactions and such.
Switch to credit
If you receive payments via cash it is always smarter to bank them immediately. If there are expenses that need to be paid for with payments that are coming in, use your credit card. Using credit instead of cash keeps your cash liquid enough for you to take some in case of any immediate emergencies. Other than that using your card improves credit history and opens up chances for perks and rewards offered by banks and businesses alike. Not only has this but it most of your transactions are digitized. This way you will not be worried about losing any receipts and will have a statement recording your every expense.
It’s not personal
Make sure to keep your business and personal accounts separate. Even if you have a small business it is wise to always spend on the business from the business and separate a portion for your personal use. Keep one credit card for your business expenses and another for personal spending. If the two accounts are kept as one it is often a pain to separate them later. This might even cause problems for your taxes at the end of the year.
If you feel under equipped to handle your accounts be sure to ask for help. Asking a friend or family or even hiring a consultant at the beginning, till you get the hang of it, is a smart business move. The most important tip is to keep learning. It’s always good to be informed about how to handle your finances.