Let’s be honest here for a moment. How many of you are in control of your finances for your business? I know this is a touchy subject. There may be many of you who are in control and feeling confident, and that is awesome. But for those who aren’t, it’s time to get real.
How many of you are living business paycheck to business paycheck? How many items have you purchased, only to never see that income again? I don’t know about you, but that gets old real fast.
With a new year, now is the chance to start fresh. A clean slate. (Yes, you still have to figure out your finances for 2015.) It’s time to get your finances in order and start the year with YOU in control. It’s time to be the CFO of your business.
This may sound overwhelming, but here are a few tips that will help you go in the right direction. Like anything else out there, it takes effort and consistency. With today’s technology, there are no excuses.
- Figure out what it costs to do business. This doesn’t include the cost of goods in the collections you offer your clients. How much does it cost to run your business each year? This link has been helpful in doing the math. It’s an eye opener. ACTION: Use the link to list what you spend monthly and yearly on your business. Ask yourself where can you cut out unnecessary expenses, budget for workshops, put away a rainy day fund, etc.
- Have a separate checking account for your business. It makes it so much easier to do your accounting. Nowadays, there are so many cool banking services. Services such as depositing checks on your mobile phone and access to online banking make it much easier. ACTION: If you don’t have a separate account, now is the time to do it. Many banks offer opening an account online.
- Use an accounting system. This doesn’t have to be fancy. Choose from the old style of pen and paper, to online cloud-based software. Choose something that works for you. I have personal experience with the pen and paper format, Wave.com and Self Employed Quick Books. I ended up with Quick Books. The features are far more intuitive and it let’s me see the bigger picture in a variety of ways. ACTION: Choose an accounting system. Check out Wave (free), Self Employed Quick Books ($12 a month), 17 Hats ($29 a month). There are many more out there. The key is to CHOOSE one and be consistent with it. Set aside one day a week to do accounting. Schedule it like you would any appointment.
- Keep and organize receipts & expenses. How many times have I lost receipts and wasn’t able to maximize my write- offs? A ton. Not any more. There are some cool apps out there that will take a picture of the receipt and even go as far as categorizing them for you (Shoebox.com $8 a month). I’ve used an app called Scannable. It scans receipts from you phone and you can email, text or store them. Expensify is another app that I recently checked out. It keeps track of milage, receipts and expenses. MileIQ is a great app that tracks your mileage. There is a free and paid version. Totally worth the $40 a year to keep track of mileage. Or you can take a picture of the receipt on your phone and input it . You can also have a monthly envelope in your purse or office to keep receipts. ACTION: Set up a system to organize your receipts and expenses. Keep it simple.
- Seek accounting & tax strategy services. Each city, county and state has different requirements. It’s worth every penny to seek out expert advice so that you are receiving the maximum benefits when it comes to your money. ACTION: Contact a local accountant or attend a workshop about setting up your finances to work for you.
Having your finances in order is essential to having a successful and sustainable business. Remember, putting in the time puts money back in YOUR pocket, and into your business.