Small business owners have the responsibility of ensuring the smooth running of their business operations. To aid the process, here are the five financial tips every small business owner needs to know to ensure their financial data is systematized.
- Know Your Tax Benefits & Deductions
The tax laws are designed to benefit small business owners. According to a Forbes article, 9 out of 10 business owners are overpaying their taxes. This suggests that most small business owners are leaving money on the table. Small business owners should make it their responsibility to take advantage of the tax deductions and benefits that are available to them. It is highly recommended that an expense and tax deduction checklist be kept handy. If you need one, email us at firstname.lastname@example.org. Also, it is recommended that you schedule a tax planning session with your accountant so they will be able to help you figure out tax deductions that are specific to you while helping you maximize your tax benefits.
- Retain Your Receipts
By retaining your receipts, you have a better chance of claiming all tax benefits entitled to you. Also, retaining your receipts helps to keep high integrity and accurate financials for IRS purposes. Some tips to help in saving your business receipts:
- Keep an envelope in your car or purse to maintain business receipts
- Once per week, transfer those receipts to your tax folder that you have in your files
- Take a picture or scan your receipts every month and store them in an online backup system so you have duplicates.
- Record All Expenses
When keeping accurate track of your expenditures, try to not pay with cash, but if in the event you do, always be sure to get a receipt and write the business purpose on it. In addition, you want to establish a method to keep track of all your expenses, like an income and expense tracker, which can be created manually or online like using a Microsoft Excel spreadsheet or google docs. As you expand, you would want to obtain accounting software such as QuickBooks Online.
- Keep Track of Accounts Receivables
To ensure you are keeping account of every dollar coming and who still has outstanding balances, you want to have a proper receivables system in place. Next, you want to use that system to follow up on unpaid customer balances. As payments are received, you want to apply them to invoices, so your accounts receivables system is kept up to date at all times. It is encouraged to automate your accounts receivables process by using a system such as QuickBooks Online.
- Hire a Professional Accountant
Many business owners try to save money by recording their financials themselves, but the reality is not hiring an accountant can cost you more money in the long run instead of saving you. It is resourceful to have an expert who is experienced and up to date on the ever-changing tax laws so they can help you maximize your chances of claiming all the deductions you qualify for. That person will be able to schedule a tax strategy session with you and go over the tax benefits that are specific to you. They can also help you keep your financial paperwork accurate and organized.
Don’t skimp on your business finances. It will cost you more in the long run than it will save you. Book a consultation with ERJ Services.