Streamlining Your Business Money Management

It is no secret that money can get really messy really quickly when it comes to running a small business. Missing receipts, the mileage that doesn’t make sense, and a stray bill that you forgot to pay. So what are you supposed to do?

In general, the quicker you make a start, the easier it is to get everything streamlined. But what do you do to get there?

Personal And Business

And ne’re the twain shall meet. Most small business owners and freelancers have all of their incoming and outgoing in one place. But that can prove to be a pain when you need to pull up records. Some transactions get lost. And wouldn’t it be annoying not to be able to find that office purchase – that you know is a tax-deductible, but you can’t remember when it happened – or the exact amount?

When you only have a business account that deals with your income and business bills, you will be able to keep a much cleaner record of what you are earning and spending.

If you don’t already have a business bank account, you should be aware that you don’t need a ‘business’ account – but rather one that is separate – for most instances. That will change depending on how your business is legally set up.

Accounts

This ties nicely into the first point. Stop leaving them till the last minute. It is stressful and messy. Once you have your cash flow separate properly – you stand a chance of actually getting your accounts in better order. Accounting software will give you a lot of options and control. You will be able to see your total income and the taxes and VAT that you need to pay out. You can also see if you can make one or two business purchases that will reduce your tax payments. Make your accounts work for you by working to keep them clean.

Debt

This one is pretty simple. Whenever possible, pay for goods when you order them, don’t take on credit lines that aren’t 100% required just because it is offered to you. Debt can cripple a business in a matter of months if there is a quiet period. If you do have a few debts, pay them on time and pay more than you need to. You will smash down the interest and repay them much faster – which is all to your benefit.

Buffer

When you have a period of time that work is a-plenty, resist the urge to spend big. You should put some away for when you might need to replace something like you working computer or purchase travel tickets. And, of course, you should always make sure you are putting enough money away for the tax man too.

When you are streamlining your finances you ideally want to use the least amount of apps and software possible, it will keep things neat and tidy. Make a copy of your paper invoices and receipts, and keep a digital file too.