April is National Financial Literacy Month and a great time to organize your financials to contribute to the success of your business. Here are five ways to get started!
Separate Your Personal and Work Finances
It’s important to separate your work and personal finances which makes it easier to track your business expenditures and revenue. This includes having a separate business checking account and a separate credit card for business-related purchases.
Use Financial Software
There are many options for tracking your business finances and bookkeeping functions including QuickBooks, Spark, FreshBooks, Wave and others. Enter your information each week to keep data current and prevent a backlog of data entry. The software also enables you to generate reports at a touch of a button to help you measure key business metrics. This software can also be used to separately track your personal expenses, which is an added benefit.
Create an Easy Filing System
Whether you are receiving hard copies of bills or electronic versions, ensure you have a clear filing system for quickly finding files. Consider having main folders for each year and then include folders for each category, such as accounting, marketing, licenses, etc. This makes it easier to find material and know when it’s safe to archive items based on IRS regulations.
Set up automatic payments for as many monthly invoices as possible. This will prevent any late payments which can hurt your credit score.
When possible, transfer money to a business savings account to assist with covering any unplanned expenses. Just like with your personal finances, having a rainy-day fund offers many advantages including helping to cover quarterly or annual bills, such as taxes or business purchases.