How to Keep Track of Small Business Finances?
Financial management is an integral part of any activity. Recording, analyzing, and keeping track of receipts can be daunting for a small company. The right approach and convenient tools make this work easier and faster and help you avoid many money-associated issues.
Manage Business Expenses
To keep the financial flow under control, you have to understand the income sources and the direction of the main spendings. Your customers are direct sources of revenue, while costs might be very different:
- salary to employees;
- payment for services vendors;
- advertising and marketing;
- taxes and fees;
- software subscriptions;
- rental of premises, etc.
It’s important to log expenses that come from your company’s budget. So you can control the money flow and understand whether your current profit is enough for all your needs and whether there is an opportunity to expand your firm. A careful analysis of the documentation will show spendings that can be reduced. In no case should you mix personal finances and the firm’s budget. That’s why you need a separate bank account for a business.
Use Accounting Software
Whatever your company does, and whatever specialists you turn to, be sure to store all the papers created or received in the course of work. Since most businesses are paperless and you can also make your own invoices electronically, it’s not that hard to have an archive of documents. If one of your clients prefers to work in the old way, with physical papers, fill out an electronic form and print it out.
With platforms like Invoice Maker by Saldo Apps, you can analyze and plan your budget on the go. Now you don’t have to hire someone responsible for accounting; do it yourself. Even if you have a very small firm that doesn’t have a permanent office, you can keep your accounting records without any problems using cloud services. All the information you need is stored in one place. Besides, all your files will be safe, and you don’t have to worry that the data will disappear with the computer breakdown.
Simple and convenient programs for tracking income and expenses for a small business will significantly facilitate data processing. They take into account all the documents you create, the info entered, and the compensations received so that you can evaluate the company’s performance quickly.
Spreadsheets for a Business — What to Track?
Although any digital business income and expense tracker and accounting software are the most convenient methods of financial control, you may also keep records manually. The most popular way of doing it is using spreadsheets. Choosing the right service depends on your preferences.
You should set two main categories: income and expenses. In the first section, enter all receipts that came from clients for the tasks performed. Put information about orderers, the dates of money transfers, sums, and so on. Your account statements, which you can request from the bank, and each customized invoice you have generated will help you.
Pay special attention to expenses. There can be several subcategories here, depending on the basic directions. Indeed you spend some money on the production of goods, their delivery to customers, advertising, renting premises, paying for utilities, and so on. Don’t forget to track tax deductions, as they are an integral part of any activity. Write down the purposes of spendings, amounts, dates, and other info that helps you determine what you paid for.
Organize receipts for a small business properly so that you can quickly find the records you need. Depending on your company’s specifics, enter information about each item purchased or sold, or after a specific period, for example, a week or a fortnight. Experts recommend not making it too long, as you might miss out on crucial data.