7 tips for organizing your business finances

Whether you're a seasoned entrepreneur or just starting your own venture, one of the best things you can do for your business is to get your finances in order.

Developing a strong strategy for your business finances will establish the strongest techniques to reduce business costs, predict the future, and prepare for tax season. Here are 7 great organization tips you can start implementing today.

1. Get off to the right start financially

The early stages of starting a business are the best time to establish long-term financial health.

First, a business plan serves as a roadmap. Traditional business plans often include everything from detailed financial numbers to forward-looking plans and financial goals.

You can also explore resources to help you start your business. Various local, national, and private organizations can help you find funding and resources to start your business.

Nevertheless, you should also check whether you are financially prepared to commit a large amount of money, especially at an early stage. The amount varies widely by industry, but data shows that small business owners spend about $40,000 in the first year alone.

2. Create a business budget

Creating a business budget is similar to creating your own household budget. You want to make sure you're spending and borrowing within your means. create Instead of depleting wealth, it enriches it. Without a budget, you run the risk of overspending and falling into debt.

To create a realistic and flexible business budget, you need to answer questions such as:

• How much capital do you currently have?
• What are your business's fixed and variable costs?
• Do you have funds set aside for future expenses and emergencies?

Once you have set your business budget, you can create a profit and loss statement (P&L) or profit and loss statement. This is a snapshot of a business's revenue and expenses over a period of time, such as a quarter or fiscal year. You will also need this document when applying for a business loan.

3. Choose the right accounting software

With the right tools, managing your business budget becomes much easier and can save you time when tax season approaches.

There are many accounting software programs on the market. Choose the one that fits your industry, needs, and financial constraints. Free or low-cost versions are often available and can be upgraded later if you need more features.

Most of these programs help with cash flow, payroll, invoices, paying vendors on time, and preparing for tax season. That information is stored on your desktop and always available, so you don't have to look for receipts or worry about whether you have the cash to pay the bill.

4. Open a business bank account

As an entrepreneur or small business owner, an important rule of organization is to keep business costs and personal costs separate.

It's wise to have a savings account designated specifically for your business. Separate accounts not only help you stay on top of your cash flow, but also protect your personal assets from lawsuits and audits if your company gets into legal trouble.

“It takes some getting used to understanding how to separate business-related expenses from personal finances,” says Bob Marshall, business growth and strategy executive for small business development at Wells Fargo. states. “It can also take time to open a business account and put systems in place to properly track your business's finances. But that separation is important. How healthy is your business?” It will help you make decisions and make your life a lot easier during tax season.”

You can also tweak your accounts to make organizing your finances even easier.

said Sejal Lakhani-Bhatt, CEO of CloudWerxe and TechWerxe. “That way, you know for sure that you can get money to them when they need it.”

5. Choose the right business credit card

As with savings accounts, don't fall into the confusing trap of mixing personal and business credit card transactions. In addition to unnecessarily complicating your financial picture, personal cards don't offer the unique benefits for your spending or organization that business credit cards do.

Choosing a business credit card depends on your credit score and what you want from your account.

Some business credit cards come with free expense management tools. The American Express® Business Gold Card comes with an annual year-end summary, the ability to connect your account to Intuit QuickBooks, access to Vendor Pay by Bill.com, and more.

If you want to give specific employees access to your account, many small business cards, such as Chase's Ink Business Preferred® Credit Card, offer additional employee cards for free. You also don't have to wait for them to submit expense reports because you have instant access to their transactions.

Business credit cards can also help you build a business credit score, which is different from your personal credit. Good business credit is essential to access future financing, insurance, and more.

6. Make regular reviews and audits a habit

Even with the best systems in place, financial management can become a problem when things get busy. If that happens and you take too long to get back on track, all the hard work you put into creating your business budget can be undone.

Mark your calendar to review your finances at least once a month. However, the more often the better.

Lakhani-Bhatt checks her accounts receivable, accounts payable, and monthly invoices twice a month so she can catch any changes needed early. “Every quarter, I look at the projects I want to do and look at the prices,” she says. “We conduct a thorough review of our vendors every year to determine if new technology is needed.”

By making a commitment to making reviewing your business's financial health a top priority, you can ensure you're staying on track and adjust your budget as needed.

7. If you don’t have time, delegate or hire.

Eventually, you may feel overwhelmed by the demands of keeping your business finances in order. Before that happens, please take your temperature.

Are you worried about being able to pay your vendors and suppliers, or have your credit card bills become uncomfortably high? Are your expenses too high but you don't know how to lower them? • Are you behind on your quarterly scheduled taxes?

In any case, if you are unable to manage your business's finances yourself, you may be better off delegating it to a qualified and trusted person within your company or hiring an outside professional.

A bookkeeper can take on responsibilities such as monitoring expenses, paying bills, and recording transactions. Accountants provide long-term financial advice and tax support. Assess where you're lost and decide what kind of help you'd benefit most from.