Tips To Keep Your Business Finances In Order

person reviewing and writing on accounting documents

Keeping your business finances in order is a challenge that most companies face. Fortunately, there are a few essential steps that you can follow to make things a bit less confusing at the end of the year. Don’t wait until it’s too late to get started with organizing the financial health of your business.

Take a few of these proactive steps today to get your finances sorted out the right way:

Separate Business From Personal

Are you struggling to identify which transactions are for your business and which ones were for personal items? The key to keeping your business transactions better organized is to separate business expenses from personal expenses. If you haven’t already, you should set up a new bank account for your business that is totally separate from your personal bank account.

Keep Money Set Aside For Taxes

The government is going to want a portion of your income at the end of the year. Most businesses opt to pay their taxes quarterly to avoid a large lump sum payment at the end of the fiscal year. You should plan to keep aside about 25 to 30 percent of your income for taxes. By setting this money aside now, you are doing yourself a favour in the long run.

Utilize Accounting Software

Do you have a system for keeping up with profit and expenses? If not, you should develop one as soon as possible. Installing and keeping up with accounting software is a necessity for anyone in the business world. It can help you track cash flow through your company and make it easier for your accountant to review your progress at regular intervals.

Set A Budget

Nobody wants to talk about the dreaded B-word – your budget, but knowing how much money you have and where it needs to go is essential to keeping your business finances in order. Make a plan for how you will spend and save money by relying on a budget. This can be easily made by listing out your income and expenses. If you are struggling to figure out how to set up a cash flow, then you should talk with your accountant for help with this essential financial document.

Keep Up With Receipts

Many business owners simply keep a file in their office where they collect receipts throughout the year. This is a poor system for keeping track of your expenses. Whenever you spend money, it should be documented through your accounting software and accounted for on your budget. Never leave tracking expenses to the last possible minute or you are likely to forget important pieces of data.

Hire Professional Help

The reality is that many businesses could benefit from bringing in professional assistance to get them started with managing their finances. Compass Accounting offers expertise that can help you straighten out your business finances the easy way.