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4 Insanely Easy Tips to Keep Your Small Business Finances Organised

Small business needs high focus on organizing finances. While it is smaller money, that's all they have got and having good hold can facilitate growth for these businesses. It's always best to rely on the best ways to do it and here are some of them. Read ON!
Insanely Easy Tips to Keep Your Small Business Fin As a small business owner, it’s easy to put off your business expenses for another day. Days turn into weeks and weeks into months… then CHAOS when tax season comes and you’re scrambling to get everything in order. Not to fear though! Along with help from our friends at zipbooks.com we’ve put together a few simple tips to help manage your small business finances all year long.

Set Up a Separate Small Business Bank Accounts

This is an account that is required if you are an LLC or corporation, however we highly recommend it even if you are a sole proprietor. Absolutely. Exclamation Point. If you commingle funds between your business and personal expenses, it’s going to be a disaster come tax time. And the IRS may make you liable for a higher-than-fair tax bill. To avoid having to sort through business transactions in your personal account, open a business checking account and even a short-term savings account (or money market account).

Set Aside Money for Taxes

This is what that short-term savings account mentioned above would be for. Each month, you or your accountant should calculate your earnings before interest and taxes (EBIT). Put simply, this is your revenue for the month, less your operating expenses. Simply multiply your EBIT by 25%-30% and move that amount into your business savings or money market account.

Set Up a Filing Process

There are several different ways you can do this. Whether you choose to go with the tried and true paper filing system, the modern fool-proof digital filing systems, or a combination of the two, there’s some items you want to make sure you hold onto no matter which way you choose to store your files:

  • Bank statements
  • Contracts
  • Tax papers
  • Accounting and bookkeeping records
  • Receipts and invoices
  • Vendor records

If you’re choosing to keep paper records, consider buying filing cabinet or file box. It wouldn’t hurt to have one with a lock that is fireproof.

But, really, today’s it’s insanely easy (and safer) to do organize everything digitally, which leads me to the next point.

Use an Accounting Program

While a spreadsheet could probably do the trick, there are many low-cost accounting programs available for individuals and small businesses. They’ll save you the headache of managing everything on your own. Just about any software lets you complete your bookkeeping, view your reports and set up a digital file cabinet. For example, my company, ZipBooks helps do-it-yourselfers automatically import bank statements and transactions, store contracts and receipts, and generate simple, powerful reports. Or add a virtual bookkeeper to complete your record keeping so you can sit back and enjoy the clean reports and a headache-free tax season.

In today’s world, software can make your life a lot easier - and you no longer need a certification to use software. Combining software with tax planning is a modern recipe for keeping your business finances organized.

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Any facts, figures or references stated here are made by the author & don't reflect the endorsement of iU at all times unless otherwise drafted by official staff at iU. This article was first published here on 20th April 2018.

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