Advice for Small Business Owners

It is common for a small business owner to focus on business, production, and other aspects that go into creating their business and making it everything they want it to be without focusing on the finer details such as billing and receiving, or keeping track of how much they are profiting or collecting from their clients. Most do not hire a personal accountant right off the bat, and many believe this is a task they can do on their own, or that they can just sort everything out when tax time comes. The truth is that that this is a task they can do on their own, but efforts should be made year round and not just when it comes to tax time. This can cause business owners to leave out details or not have all the needed information. It can also mean that it took them until the end of an entire year to realize what they have been making is not the same as what they should have been making. Doing so will help you spend more time earning money from your business instead of wondering where your money “disappeared” to. Some advice for small business owners is to keep copies of all important as well as unimportant documents. This stack of paper can add up fast, so the easiest and best way to do this is to create a filing system for yourself either the old fashioned way with a filing cabinet, or with electronic spreadsheets and a scanning file folder to label and place all your documents into. Always have your end of the month numbers readily available to review, so you can track your progress month by month to see your current earnings and determine if there is something that needs to be changed. This can be done by creating a simple balance sheet. You can then re-save the sheet each month as a new file to track your progress and eventually create one for the entire year. Balance sheets include any assets and liabilities. Any purchases or expenses, and invoices that you sent out to clients should be kept, along with any disputes. Non payments from clients should also be documented, so that if this number gets too high you can begin to consider outsourced options such as employing financial adviser, collection agency, or other new methods that you may want to start implementing in your company policy such as contracts and other such ideas. Keep all of your employee records, pay stubs, and other financial records on a file on your computer as well. If there ever is an issue with the accuracy of a paycheck or other payment that you have made, you should have an employee record that you can check to verify if everything is accurate or if there was an error. Double check any invoices that you receive from vendors that you do business with. Do not pay invoices for supplies that have not arrived on time or for items that are priced at something other than what was agreed upon. In addition, do not rely on verbal agreements or any other agreement that was not made in writing. This can be done very simply by sending emails, which are both time stamped and in ink. These are only a few tips for small business owners but can prove very important when the time comes to go over your finances. It is understandable that running a business comes with a lot of responsibility, but still not excusable to let the responsibility of your finances slip through the cracks.

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