As a start-up business owner, you may be more inclined to the creative or operations side of the business, rather than the financial side. But knowing your financial standing is imperative to running a successful business. Plus, it can be fun to watch your business grow and during tougher financial times, your awareness can help you pivot in the right direction.
Your financial well-being starts with a bookkeeping system, a system that records, manages, and analyzes your company’s financial records. Bookkeeping duties may include tracking payments, paying bills, managing accounts receivable, preparing financial reports, and more. Here is what every start-up business owner needs to know to be on top of their company’s financial game.
1. Track Your Income and Expenses
One of the most important aspects of financial stability is knowing where your money is going. Keeping track of your income and expenses can help you make informed decisions about your spending and save money for the long run.
The best way to track income and expenses is with bookkeeping software like QuickBooks (more on this later). However, if you are just starting out you may not have invested in software to help you with this task. So other ways you can keep track of income and expenses is through a basic Excel spreadsheet or even a notebook. The important thing is to find a system that works for you.
2. Organize Your Receipts
Organizing receipts can be seen as a chore, but it has its benefits. By placing them in one designated location, either a drawer or notebook, they will be easily accessible when needed. An even better option is to use an app that takes pictures of receipts and stores them in the cloud. This makes retrieval simple as you can now easily sort through them on the computer.
The main benefit of organizing your business receipts is that you’ll reduce your stress when tax season comes around. Instead of scrambling to gather receipts, you’ll have them ready to go for your accountant.
3. Use Bookkeeping Software
Although there are many software programs that can help you stay organized, it is important to find one that best suits your needs. We recommend QuickBooks to help you stay organized and keep track of your financial information. QuickBooks allows you to track your expenses and income, as well as create reports. In addition, the software helps you log miles, create invoices, maintain cash flow, and track your profit and loss.
Bookkeeping software can be a big help if you want to stay organized and keep track of your finances. You'll also see where you are spending your money and adjust as needed.
4. Know Your Tax Obligations
As a business owner, it’s important to be familiar with the different types of taxes you may be obligated to pay. Income tax, self-employment tax, and sales and use tax are the most common. It’s also important to understand when each tax is due and how to file your returns.
Failing to pay your taxes can result in hefty fines and penalties. Consult a professional if you have any questions about your tax obligations.
Bookkeeping can be a drain on your time, so while following the above tips can be very helpful in running your small business, you may want to consider outsourcing the bookkeeping. A key advantage to this is that you can spend more time focusing on the operations and growth of your business. Contact us If you’d like to find out more about our bookkeeping services.