Running a small business comes with its challenges. One of the biggest challenges for small business owners is managing incoming and outgoing charges.
4 Ways To Better Manage Expenses
Tracking expenses is crucial for an organized and thriving business. We have comprised 4 simple tips to better manage your business’s expenses.
1. Hang on to Every Receipt
No matter what industry your business is in, when you first started, you were faced with many outgoing charges. In order to build the business you want and keep customers happy, you have had an endless amount of charges to your business — and sometimes out of your own pocket.
When tax season rolls around, the last thing you want to do is make educated guesses. By hanging onto every receipt, you’ll have an easy to follow paper trail.
Ensure that every receipt that you get indicates the date and time. Try to make an effort to write down the reason for the purchase either on the actual receipt or attached to the receipt.
No matter if you are filing your own business taxes or have an accountant, having all of your expenses and the reasoning behind them will help save you time and help you accurately claim expenses.
2. Take Advantage of Technology
If you are more tech savvy, start taking advantage of the many online tools that can help with managing expenses. This can be as little as downloading an app to your smartphone to as large as integrating a new software into your business practices. The key is to take on as much as you are comfortable with.
Modern technology advancements, such as smartphone apps, are a great way for business owners that are constantly on the go. You will be able to see and note the state of all of your accounts at anytime and anywhere — which can be beneficial for starting businesses with strict budgets.
3. Separate Business and Personal Transactions
One thing that many new business owners do is mix their personal finances and their businesses. Although this problem may seem inevitable, there are many ways that you can avoid it.
One way to easily avoid this problem is by designating a separate bank account for your business. This account should have it’s own debit card and even checks. This will help you clearly separate business transactions from personal transactions.
We understand that sometimes the wrong card gets swiped at the store. If you accidentally charge your groceries to your business account — it’s not the end of the world. Simply save the receipt and note the mistake. This will help you balance any mistakes at the end of the moth.
4. Get Professional Help
Managing your business expenses and profits is a full time job. Taking on additional help is a great idea for new business owners. Having a designated person to keep track of business expenses will result in less mistakes in the long run.
Hiring an accountant may seem like an expense that your business cannot take on, but in reality, you can. By using invoice factoring, you will be able to get immediate cash for your outstanding invoices.
Invoice factoring allows your business to have a steady source of income so that your business can better manage payroll and other business related expenses. A factoring company will take on your invoices and the collections process, saving you time and money with administrative tasks. By using invoice factoring, you will be able to get back to doing what you love the most, while still having full control over your finances.