The Best Laid Plans...
When you own or run a small business it seems the list of things you MUST keep on top of is endless, and you may feel you're constantly behind the eight ball.
Fortunately, when it comes to your business finances staying organized and up to date is much easier when you've set up a system. Maintenance, if done regularly, is quick and fairly painless, although every now and again your finances do deserve an in depth review and analysis.
PLANS & DREAMS
Hopefully you already have a fairly well-developed business plan, one that includes a month by month cashflow worksheet. If you don't, make one. Then, reconcile yourself to the fact that your results will most likely deviate from that original plan. That's because plans are about the future and no amount of research and insight will let you perfectly predict the future on a regular basis.
So why plan? It helps you prepare and prioritize so that you can make smarter spending and investment decisions based on the needs of your business rather than on a whim. A monthly review of actual versus predicted cash flow can also help you catch erroneous assumptions and gives you the chance to pivot and correct those assumptions quickly.
I also recommend that you take a look at your business plan from a macro view on an annual basis. Compare industry trends and market changes. By keeping yourself and your company relevant in today's fast-changing word, you can stay on track for success.
BOOKS & PAPERS
Given the advances in computes and software, there's really no reason for not keeping your books in an accounting software program. It's easier come tax time, and accounting software makes it easy to print out analysis and reports, tools that come in very handy when reviewing and understanding your business successes or stumblings.
Technology also offers us simple storage solutions. Cloud-based systems such as Dropbox, Google Drive and Evernote (to name a few) make it easy to keep things organized. An added benefit of online storage is that it can clear up your office clutter as well. Scanning or using your phone to take a picture of a receipt makes filing a breeze.
While the standard recommendation is that your paper and digital document storage systems follow your accounting software storage structure, you may not have to get into that level of detail. As long as you can find what you need when you need it, that's all that's important.
KEEPING IT SEPARATE
Combining business and personal finances can lead you down a financial trail of tears. Unsnarling a tangled mess at the end of the year can be mind-numbing and seriously anxiety-provoking. A credit card and bank account(s) that you use only for business expenses will create a smooth and trail and simplify tax time no end.
TALK TO A FRIEND
And by a friend I mean a tax advisor. Get in early and have a professional take a look at your financial processes along with your books. Expert guidance early in the game can not only simplify your day to day business life, it can also provide you with early insight that could be the key to a real edge in growing or expanding your business.