If you’re new in the small business world, managing finances might be a scary thing to deal with. Luckily, it’s 2017 and there are a million of ways to manage your finances as a small business owner. There are simple ways out there that make it easier to stick to your budgets and file everything you need. No excuses – it’s time you learn how to manage your finances as a small business owner!
5 ways you can manage your finances
Track ‘Em All
The days when you can just spend whatever you want and forget about it are over. To manage your finances and oversee your spendings, you need to track them. Don’t worry – along with web-based software, there are plenty of finance management apps that will make this easy for you. Here are the ones I’ve tested out and trust the most:
Have Three Accounts: Personal, Business and Tax/Debts
It might seem like it’s a lot, but it’s the best way to keep your finance organized and make sure you never run out of money. Create three separate accounts – use your personal account for day-to-day spendings, your business account for everything that needs to be done with your business and tax for… taxes, which is a whole another subject I will cover soon.
Distribute Your Money
Once you have those accounts set up, learn how to properly distribute your money – 20% of your paycheck should always go to your taxes and another 20%, if possible, to your savings. The rest is spent between your business and day-to-day activities. Of course, this can vary depending on your income, but generally, taxes should be the first thing you take care of.
Create Monthly Reviews of Expenses
You can do this using the apps mentioned above. Sit down for a couple of minutes at the end of the month and go over your spendings. Find out where you should be spending money and where you shouldn’t – do your best to cut down these costs the next month.
Pay Close Attention to Your Debts
Your debts should be the first thing you pay off every month, even if it’s a small amount. Prioritize them and make sure you don’t leave them behind.