As a small business owner, the list of things to do and manage is endless, and managing your finances can be overwhelming and quite time-consuming. There is no doubt, however, that it’s essential for your business. Mastering the basics of financial management can save you time and money and allow you to focus on doing what you strive to do – growing your business.
In this article, we’ll explore some key principles of financial planning, including tracking and reporting your finances, financial goal setting, and managing your receipts and ongoing expenses. We’ll also provide practical tips and tools to help you maintain your financial processes so that you can make well-informed business decisions.
At PayStubs, we love helping business owners get more time back and one of the ways we do that is with our payroll solution—learn all about it here.
Whether you’re just starting or looking to improve your existing financial practices, the tips shared in this article will be a great long-term guide for you.
- Track and report your money
- Seek expert advice
- Set financial goals and milestones (and track those too!)
- Effectively manage your receipts
- Track and segment your expenses
1. Track and report your money
The first and most crucial thing you’ll want to do as a business owner is to ensure you’re properly tracking and reporting your small business’s finances.
Tracking your small business finances is more than just a business chore. It is necessary to keep accurate records of your income and expenses to correctly monitor your cash flow and make informed business decisions about where you may need to cut spending and where you’ll be able to allocate more money.
There are several ways to track your finances. Some simple ways include using accounting software, filling in spreadsheets, or even getting a hold of the good old pen and paper.
Whatever method you decide to use, you’ll need to divide your income and expenses to reconcile your accounts regularly and have financial reports on hand to easily track the business’s financial progress. The benefits of following this tip are truly endless.
Here are just a few:
- You’ll have a clear understanding of the financial health of your business so you can make informed decisions accordingly.
- You’ll be better prepared when doing your corporate taxes and can avoid any potential penalties for inaccurate reporting.
- You’ll find it easier to apply for loans or investments in the future since you’ll have all your paperwork and finances in order.
Tracking and reporting your money is essential to achieving financial success as a small business owner.
2. Seek expert advice
If you’re a one-person show, sometimes you need to reach out and ask for a little help. Getting advice from a financial expert can help you make better-informed decisions and enable you to achieve your business goals.
Whether you need help setting a budget, managing your cash flow, or navigating tax regulations, many professionals can assist you. Great sources you can reach out to are financial advisors, accountants, and business coaches, who often have experience and insight and can guide you through a plan tailored to your needs.
Make sure, however, you’re seeking expert advice from professionals with relevant experience – and don’t forget to consider their fees and availability when selecting.
Investing in expert advice is certainly an investment that will generate a favorable return and save you time and money and provide you with the peace of mind that comes with knowing you’re making informed decisions.
3. Set financial goals and milestones (and track those too!)
You’ve probably set goals to get your business to where it is now, so it’s worth doing the same for the financial state of your business. Setting clear financial goals and milestones is crucial for small business owners to stay on track and measure their progress.
Remember the SMART goal-setting technique — you’ll want to use that. Create specific, measurable, achievable, relevant, and time-bound goals, and you’ll find you can track your financial performance over time.
Whether the goal is to increase revenue, reduce expenses, or improve your cash flow, setting identified goals and constantly tracking your progress will help you stay motivated and make informed decisions. By regularly reviewing your financial goals and milestones, you can adjust your strategy and stay on track toward achieving your long-term financial success.
4. Effectively manage your receipts
Do you need a copy of your receipt? Yes – always!
Managing your receipts is a crucial part of small business financial management.
Keeping track of your expenses helps you identify areas where you can cut costs, claim tax deductions, and make informed business decisions. By implementing a receipt management system, you can simplify tracking your expenses and save time in the long run.
Consider using cloud-based accounting software to capture and store receipts electronically. Alternatively, you can use a dedicated receipts tracking app that automatically scans and categorizes your receipts.
By going paperless, you'll reduce clutter and ensure your receipts are safe and secure.
Having a clear record of your receipts makes it much easier to prepare for tax season, provide evidence of expenses, and apply for loans or investments in the future. Less panic at tax time sounds great to us!
When you manage your receipts effectively, you'll better understand your business's financial health and be better equipped to make informed decisions.
5. Track and segment your expenses
If you’re a business owner, you certainly know there’s great importance in tracking and segmenting your business expenses.
From an accounting and tax standpoint, categorizing your expenses and tracking them in detail allows you to identify areas where you can cut costs, make informed business decisions, and where you can begin to expand.
This process involves tracking your expenses in specific categories.
Note things such as the cost of rent, salaries, supplies, or marketing, and analyze how much you spend on each category over time. It could help to use accounting software or a spreadsheet to segment your expenses.
When it comes to salaries and wages, turn to PayStubs to keep a record of how much you're paying your employees, contractors, or workers. An added benefit of our payroll solution is that it also eliminates unnecessary employee and employer disputes over inaccuracies in payment.
You’ll learn how to manage your finances and achieve your long-term business goals by tracking and segmenting your expenses.
Effective financial management should be at the center of the financial goals of your business. By mastering the basics of financial management, including tracking everything, setting goals, and seeking out expert help when you need, you can save time and money, reduce stress, and make better-informed business decisions.
You'll be able to focus on what you love to do while you’re on track to achieving long-term business success.
Try PayStubs’ payroll software today if you want to start saving time and money and streamlining your operations!