If you're an entrepreneur, you must be good with money, right? Not always
the case. Here are some money tips for business owners, whether you're a
sole proprietor or have a handful of employees.
All business related expenses need to be tracked. Even if you work in
your vehicle, you need to have a file or container to put your receipts
and invoices in that is designated just for business expenses. Get into
the habit of not throwing any receipts away. If you are not used keeping
all of your business receipts, pick something that will work for you.
Pick a pocket of your purse to put every receipt in. Automatically put
all your receipts in your wallet and empty it into a file weekly - or
daily. Just find a routine that works for you.
Record Deposits Correctly
Your accounting software should be checked against your bank statements
so that you can make sure your deposits match exactly. Also with returns,
its necessary that they're recorded to the expense account that was
originally used with the item was purchased.
Don't get caught at tax time without the funds to pay your taxes. It is a
good idea to set aside money from every deposit for this kind of expense.
Taxes are paid quarterly in most businesses, and if you get behind on
your quarterlies, you could end up digging a pretty deep hole for
yourself. The toughest money issue to get used to for new business owners
is that all money that comes in does not profit make!
Watch your accounts receivable. Don't let late pay clients bring your
company to its knees. Cash flow problems can be a business killer. If you
are not comfortable asking your clients to pay their bills, it is
important to find another person to do that for you. Often entrepreneurs
and business owners start their business because they have a passion for
their product or service, not a passion for bill-collecting. Timing can
also be a factor here that a second pair of eyes trained in bookkeeping
can help you overcome annual cycles of sales highs and lows. Something as
simple as adjusting due dates could make the difference in cash flow.
Procrastinators beware! Don't wait until the end of the year to enter
your transactions into your accounting software. In the very least, enter
your transactions the week your bank statements arrive. You will get to
know your business better if you balance your incoming and out going
transactions on a regular basis. Schedule a time on your calendar, just
like any client meeting or sales appointment to do your books. If you are
too busy for this, seriously consider getting a bookkeeper.
Get a Bookkeeper
Your bookkeeper is not your accountant. A trained bookkeeper is one of
those expenses that bring a return on your investment. They know your
accounting software better than you and what takes you hours, takes them
minutes. If data entry is what you started your business for, by all
means, go to town. When you think about what your time is worth, how many
sales you could be making instead of searching for a lost deposit, or if
you think "I'll do the books next week" each week, time to hire a
If your business is in the area of Fargo ND, Jamestown, Hunter, Hillsboro
in ND and Detroit Lakes in MN, call Angie Lorshbough at Smart Business
Solutions, LLC Or check your local area for a trusted bookkeeper. Better
yet, as a business colleague for a recommendation.
Angie Lorshbough is the owner and president of Smart Business Solutions,