Business owners tend to keep a lot of financial details about their business in their heads. When you don’t have a system in place important things can be overlooked. Too keep surprises at bay, deadlines met, and goals achieved, consider the following:
Plan for Major Expenses - Put these in the calendar a year or more in advance. This allows you to plan for the best time of year based on your businesses cash flow. Planning also avoids having to scramble for a loan when the expense becomes mandatory.
Track Expenses - A credit card designated solely for business expenses can be used as a basic accounting system. Use your card for all expenses, even coffee dates & a box of pens as little things add up. Since actual receipts are required should you ever get audited, either attach monthly receipts to credit card statements or file in a monthly folder.
Track Invoices - All too often sending out an invoice is just the first of many steps to collect on your receivables. Make sure someone is tracking outstanding invoices. Late payments hurt your cash flow.
Record Deposits Correctly - Utilize a system to keep your financial activities straight. www.quickbooks.com is a great option. Business owners typically make a variety of deposits into their bank account including loans, revenue from sales and cash infusions from personal accounts. Without accurate records you could erroneously pay taxes on more money than you've actually made.
Set Aside Money for Paying Taxes - The IRS can levy penalties and interest for not filing quarterly tax returns on time. Note tax deadlines on your calendar and systematically set aside a portion of your income into a separate account for taxes. www.ingdirect.com is a great place to stash short term money.
Implement these measures and find an easier tax time in 2012! Organizing finances not your favorite business activity? Hire a bookkeeper and check this off your to do list!
