One of the most important things you can do as a business owner is to pay attention to money management. If you want your business success to turn into personal financial success, you need to be aware of what is going on with your money. Here are 5 money tips business owners should remember:
1. Separate Business and Personal Accounts
First of all, you need to keep your business finances separate from your personal finances. Your business should have its own bank accounts, and you should make it a point to use different accounts — including credit cards if you can — for your business expenses. As much as possible, your personal finances should be kept away from your business finances. Even if you end up having to write yourself checks, maintaining this separate is vital.
2. Set Up Regular Invoicing Policies
One of the best things you can do as a business owner is set up regular invoicing policies. Look for the right invoicing tool for your business, and make it a point to invoice on time, and do so accurately. You want your clients and customers to pay as quickly as possible, and you invoicing policies can make a big difference.
Your invoicing tools should also be compatible with your bookkeeping software. There are plenty of tools out there, including Due.com, that can provide you with integration with your bookkeeping software, including QuickBooks.
3. Get Proper Insurance Coverage
This is one of the money tips that is often overlooked by business owners. However, the right insurance coverage is vital if you want to protect your business and finances from problems. Liability and property insurance can help you protect your business assets as well as your personal assets.
You can also get other types of insurance depending on the type of business you run. You might find that income protection insurance or errors and omissions insurance can help you stay ahead of the situation if your business is put at risk by natural disaster or by claims that you gave wrong advice. Consider the possible claims that can be made against your business, and get the right coverage.
4. Consider an Accountant and/or Lawyer
While it’s tempting to do everything on your own as a business owner, the reality is that sometimes you need professional advice. You might think that this doesn’t make sense in a list of money tips, but the right help can save you money in the long run, since your lack of knowledge and expertise might be very expensive. Plus, the right team members can free you up to focus more on growing your business and increasing its profitability.
A good accountant can help you set up your business properly, and ensure that you follow good payroll and tax practices. The right lawyer can also help, especially if he or she is well-versed in small business concerns. You can get food advice about how to proceed, and what shouldn’t be left out.
Another consideration is hiring a professional bookkeeper. At the very least, consider getting good bookkeeping software that can help you keep track of your income and expenses, especially if you have payroll concerns.
5. Keep Good Records
Finally, make sure to keep good records, and require your employees to keep good records likewise. You should keep receipts, and make notes of what was discussed at business meetings. Don’t forget to have your employees keep good records, too. Require them to submit travel receipts for reimbursement. Even your petty cash should be subject to good record keeping. Have a record book and issue receipts for petty cash expenses.
Good records can help you at tax time, and protect you in the event of an audit.