When it comes to your business finances, you certainly need to know how to handle them. Unfortunately, many entrepreneurs get way too excited when money lands in their bank account and spend it on things that they really shouldn’t.
Let’s talk about the things you should and shouldn’t do with your business finances to make sure you get off to the best start:
Do: Get An Accountant Right Away
Don’t: Try To Do Your Accounts Yourself
When starting a business, one of the smartest things you can do is get an accountant right away. You need to be diligent about making sure that you’re saving receipts and recording absolutely everything relevant to your business. You don’t want to jeopardize your business and becoming lax with tracking this stuff. Over time, this could hinder your growth.
You may think that you’re smart by trying to do accounts yourself, but think about it properly. You have just started a business, and you want to devote as much time as possible to whatever it is about, don’t you? Trying to do your accounts yourself will no doubt mean you have to take time away from your business and lose money. You may also find that you’re demotivated, and your efforts all throughout the business are watered down. Do yourself a favor and get an accountant.
Do: Put Money Aside To Pay Your Taxes
Don’t: Wait Until The End Of The Tax Year And Panic
Now, hopefully you’ve chosen a smart accountant and he or she will stuff them anyway. The right accountant will be a brilliant monetary advisor for you. However, we’re going to say it anyway: put money said,”o pay your taxes. Do this right from the start. Don’t wait as it can land you in hot water later on down the line, and anybody who starts a business will run into some kind of emergency at some point. Make sure you save a good chunk of money to put in your taxes, along with an emergency fund. To the point where you probably feel like you have no money for yourself. Wouldn’t you rather be safe this way?
Under the criminal finances act 2017, employees, associated people and third parties can not commit tax evasion while working for a company. Those who fail to pay their taxes are looking at penalties as outlined here at https://www.qdosaccounting.com/criminal-finances-act-2017/. You not only need to make sure that you’re putting money aside for taxes, but that you’re taking reasonable prevention procedures on top of this, such as risk assessment and monitoring/review. You could build yourself a terrible business reputation if you ignore this advice.
Do: Pay Yourself
Don’t: Take Whatever You Want
It’s a good idea to have a set amount to pay yourself – and don’t be too kind. You know you need to put money aside for your taxes. You know you need an emergency fund, just in case. You also need to pay the accountant that you hired earlier. You may need to pay yourself even less than what you were earning in your previous, menial job. However, it won’t be like this forever. Sticking it out at the start, working hard and getting paid peanuts is pretty much what entrepreneurship is all about.
Don’t dip into your business finances whenever you need something. Sure, if the business needs something then it can be noted down as an expense. However, you shouldn’t just dip into your money willy-nilly. Be strict with yourself and think of it as ‘the business’s’ cash rather than your own.
Do: Cut Back Consistently Wherever You Can
Don’t: Get Too Comfortable
Having a business also makes it important to cut back wherever you can. Don’t just start a business, choose your suppliers, buy your equipment, select your premises and then go along your merry way. Ask yourself regularly; do we need this? Is there a way we can cut back here?
Most people cut back by negotiating with their suppliers after they’ve built up a great relationship with them. You can also purchase equipment and things second hand at the start. Being kind to the environment is a wonderful PR move, and can save you money too. Never get too comfortable with where you’re at. Even big businesses look for ways to get money back into the budget. Respect your budget. It doesn’t mean you have to struggle, it simply means you are a business that’s smart with cash.
Now that you know what you should and shouldn’t be doing when it comes to your business finances, you can get off to the best start. Don’t make the same mistake that excited entrepreneurs do and see dollar signs in your eyes. Keep your head screwed on and think of the long-term plan. Good luck!
