3 Easy Financial Hacks For Business Owners
Are Your Business Finances Seemingly Out Of Whack Lately?
It’s perfectly normal if you’re a new—or even established—business owner to feel a little overwhelmed when it comes to finances.
As a key element of your business, there is such an abundance of moving parts (like invoicing, paying taxes, sticking to your spending plan, etc.) that many business owners can make simple mistakes that hurt their businesses.
We’re to help you avoid these mishaps by getting your business finances in order.
In this blog article, we’ll take a look at three easy financial hacks to take back control of your accounting system and grow your business.
3 Easy Financial Hacks For Business Owners
● Stick to the spending plan in your business plan
● Keep personal and business accounts separate
● Schedule financial meetings each quarter of the year
Hack #1: Stick to Your Business Plan’s Spending Plan
A business plan is your company’s roadmap to success.
It should outline all the steps in how you’ll build your business each month to year to grow your wealth—and scale your business.
Your business plan should include your business’s spending plan (aka your budget) to help you spend and save funds appropriately.
A standard spending plan for your business would have:
● Spending plan period (usually a year)
● Estimated revenue
● Fixed and variable costs (i.e. fixed=property or loan payments, variable=advertising or shipping costs)
● Operating and overhead expenses (i.e. website fees, inventory costs, etc.)
We know that circumstances can change due to the market climate and other variables, but a strong business plan should assess these estimated risks to help you stay afloat.
If things aren’t going according to plan in your business at the moment, it could be due to you not sticking to the financial rules you set in place.
Review your spending plan for your business and do your best to adhere to it!
Hack #2: Keep Your Business and Personal Funds Separate
This may seem obvious, but when business isn’t doing great, it can be tempting to dip into your personal savings to pay for your company’s expenses. The reverse can also happen when you’re in a pinch and need extra cash.
Keeping your business and personal finances separate is necessary for organizing and growing your business’s wealth.
If you only have one or two accounts—one to share both personal and business expenses or one for each—your finances can get muddled quickly.
Open up separate business accounts for the main expenses for your business—and don’t use them for anything other than their assigned roles.
For example, your business may have to pay taxes, invoices and other bills. It’s handy to make a savings account for each so your funds don’t get mixed together, and leave you reaching into your own wallet to cover them.
Hack #3: Set Up Financial Meetings Often
Staying on top of your business finances means frequently reviewing your spending plan and overall money goals.
While each business is different, we recommend scheduling financial meetings with your trusted accountant or Financial Planner at least each quarter (although at the end of each month is better!).
When you stay in the know about your business’s every financial need, you can make informed decisions as you plan for the next month or quarter.
The most important topics to go over in your financial meetings are:
● Money goals, expectations and progress
● Expenses and cash flow
● Spending and saving plans
● Tax strategies
● Investment strategies
● Business exit strategy
These topics can be divided into categories such as “urgent” and “important.” This helps you address the most pressing financial issues first, then handle the ones that are still important but can stand to wait.
