4 Easy Steps To Get Your Financial House In Order Before 2015
Too often, small business owners like to reflect on the financial year they've had when New Year’s Eve is rapidly approaching. But that can be far too late for some important decisions you may want to make in relation to your finances.
See, you don’t have to be a large business to stay on top of your finances. Everybody can – and should. Here are some good tips to follow now before the end of the year so you can go into 2015 with your business’ financial house in the best shape possible.
- 1. Stay On Top Of Your Numbers
It’s hard to know how good of a year 2014 was for you if you don’t have a great handle on your expenses and income.
First, let’s take a look at your receipts. Are you good about tracking what you spend as a business? For example, what kind of equipment do you invest in or do you keep track of your vehicle mileage? On the other hand, do you also keep records of your invoices, checks and other receipts that show income?
2. Have It Down To A System
There are a number of solid systems you can use for tracking your numbers, QuickBooks being one of the most popular. But it’s not about just finding the right software. It’s about being consistent with entering in your monthly information. Because if that doesn't happen, it may not matter what kind of system you have.
3. Plan Around Your Cash Flow
Over time, you probably see a bit of a pattern month-to-month or quarter-to-quarter. Perhaps you see a typical time of when cash tightens up more and the receivables take longer to come through the door. All the while, you’ve got bills to pay – many of them likely within the same month.
You don’t have to feel powerless here. It’s a cycle of cash flow that every small business needs to recognize. It may take a while to see it, but the more in touch you are with that ebb and flow of your business, the better you can prepare for what lies ahead in how you budget your finances and your time
4. Deduct And Conquer
Getting fully familiar with those items you can deduct will help you plan which purchases you should make before the end of the year. For instance, what kind of equipment or supplies do you need for your business? Do you have a vehicle that’s dedicated to business use? There may be an opportunity to buy these items and take a tax write-off if they are essential to your work and adding to your income.
To get a more definitive sense of what you can and can’t deduct, have a conversation with a recommended accountant who can help you better understand how to maximize your deductions.
Being proactive with the finances of your small business now may not only help you gain some great advantages come tax season but may also provide just the momentum you need to keep track of your business finances more efficiently for next year and many years to follow.