Entrepreneurs are self-taught in most respects, but when it comes to managing business and finances, it’s important to get prepared. Keeping track of receipts, accounts, and payments throughout the year and maintaining stable financial records is easier said than done. If you have a small business that you want to nurture into a giant business, here are some crucial financial tips for you. Before you receive your first salary, it’s important to understand how income tax works.
Almost every company, except the smallest, invests in some form of cloud accounting software. Cloud accounting software can be a perfect solution for business owners who prefer not to hire a professional because of the Sage Intacct certification training costs involved. For growing limited businesses, cloud accounting software is often used in conjunction with a professional small business accountant to ensure all of your accounting and tax obligations are met.
The way tax laws are written at both the state and federal levels, there’s not much room for error. Not paying attention to these rules, as well as proper tax planning to take advantage of the opportunities available to save, means that a business could end up losing money or end up paying penalties and tax interest. Both can devour a company’s soul, and poor tax control can lead a company all the way to bankruptcy.
But sometimes the unexpected happens and you are left with the need to cover an emergency cost. While keeping track of your accounts receivable is essential for smart money management, getting paid is even more important. You can make payments by sending late invoices and notifications to customers. And if your business needs money before the due date, you can offer a prepayment discount.
Failure to meet deadlines for filing tax returns and payments can incur penalties and interest. These are unnecessary costs that can be avoided with a little advance planning. Keeping accurate records saves your business time and money, and you can be sure that you’ll only pay the tax you owe. That’s why it’s important that you meet your obligations: see Setting up a basic registration system.
We can offer you a full range of options to help your business emerge unscathed from a problematic financial position and become a profitable business again. We can also advise you on formal and informal insolvency processes that will help you achieve the best solution for you and your business. There may be some relatively simple ways to increase your income that you’ve overlooked.
Setting goals is an important step in developing a financial plan or budget. Even if you are not required to separate business and personal funds, this is critical for money management. In addition, business bank statements are useful for tracking profitability, reconciling your books, and checking expenses.
For example, something as simple as offering a prepayment discount to your customers can lead to a short-term cash flow injection. Alternatively, if you’re not using all the available space in your business premises, consider subletting unused square footage to increase additional income or reduce the size to lower your rent. On the other hand, if you have a method of marketing your business that has been proven to generate results, temporarily increasing your marketing spend will lead to a resurgence in sales. It’s impossible to plan for every eventuality in business, so just like in your personal life, it’s worth having some savings you can fall back on when faced with unforeseen costs. If you have some money left at the end of the month, fill up your savings fund and make sure there is always a minimum amount in the account. That reduces your reliance on a business overdraft and credit card to cover expenses such as long-term staff sickness and vehicle breakdown and allows you to take advantage of unexpected growth opportunities.