Controlling business finances

If you struggle to control your business finances, this article will provide you with some easy tips to help you organize them in an effective and efficient manner:

Tip # 1 - Don't pile the bills

Small business owners often find themselves struggling to control their business finances because they simply do not spend the right amount of time on them. Many owners will make a large pile of all the bills and invoices that need to be entered into the computer and they don't really know what their cash-flow situation looks like. To gain control of your business finances, spend time inputting the bills on a daily basis. If you have an employee that looks bored, have them spend some time inputting the bills for you. This doesn't take that long and it can really help you manage your cash-flow properly.

Tip # 2 - Separate business finances from personal finances
One of the common problems business owners run into is that they use their company credit card to purchase personal items. Business finances and personal finances must be kept separate from one another. This will help when it comes time to file you business taxes and personal taxes. Using business money to pay for personal items can get you into trouble with the IRS and it can also cause your business to go under if you cannot control what you're spending.

Tip # 3 - Reconcile your accounts
Always make sure your bank statements and account balances match up regularly. If you don't do this often, you may have a small error that turns into a bigger problem and it can be the cause of over-drafted accounts or missed payments. Keeping your accounts updated on daily basis will let you know exactly which checks have cleared the bank and which ones you are still waiting on. Spend some time to input your cash transactions into the ledger and make sure to deposit them in the bank, not your pocketbook.

Tip # 4 - Software
One of the best things you can do for your business is to purchase some good accounting software. Software programs like QuickBooks will handle all your business needs from invoicing to payroll taxes. This will make your business run better and it can remove some of the stress you may be feeling. If you don't have time to spend organizing the data, hire a bookkeeper. Hire the bookkeeper to come in part-time to manage your accounts so you don't fall behind and end up in trouble with your lenders. The benefit of using a software program like QuickBooks is that it is easy to learn so you don't need to pay thousands of dollars to hire a professional accountant.

Tip # 5 - Notifications
Set up some email and phone notifications when bills are due. Using a timing method will help you avoid late payments and it can help you pay your employees on time. Ask your bank to base your statement on a calendar basis so it can correspond with your software program.

Tip # 6 - Automatic Payments
One of the best things you can do for your employees and creditors is to enroll in automatic payments. For a low fee, your bank will automatically transfer the appropriate amount to each of your employee's bank accounts on payday. They will also do the same for your lenders. You can easily set this up through your bank's web site. If they do not offer direct deposit, hire a payroll company to handle this for you. Payroll services will handle all of your tax information also and it will be much easier for you and your staff members.