Just like your car, your business finances need routine maintenance.
If you ignore them, your business might break down. In the middle of nowhere.
What you need is a schedule, just like the one you use to pencil in oil changes and tune ups for your car.
You can do this for your business finances easily by assigning certain tasks to certain milestones and time periods, so nothing slips through the cracks.
Weekly Maintenance for Finances
There are two tasks you must stay on or they’ll overwhelm you.
1. Enter expenses for your business.
Make every Friday (or whatever your “slow day” might be) an “expense entering” day so you can get it all done at once. (If you use Outright, of course, the data entry part is taken care of for you. But you’ll still want to review the week’s expenses to check for errors or notice possible overspending.)
2. Categorize all your expenses.
Perform a weekly categorization of your expenses to make things easy when you need to report deductions to get the highest refund possible at the end of the year.
You know, group things as personal expenses, meals + entertainment, supplies, contractors, travel, etc.
Monthly Maintenance Tasks
When was the last time you looked “under the hood” at your profits and loss?
At where your business is, where it’s going, and where you want it to be?
We suggest looking at your P&L once a month. We know, you’re busy. But deluding yourself into thinking you’re making more (or less!) money than you actually are helps nobody.
Keep yourself up to date by checking records every month. The results may surprise you and help you get back on track.
Business Finances Maintenance for Every Quarter
Ah, we all know what goes here, don’t we?
The dreaded quarterly estimated tax time. Time to figure out how much we need to pay the government piper.
However, it’s not a problem now that you’re tracking and categorizing your expenses and analyzing your P&L numbers. In fact, it’ll almost feel like cheating. But relax…you’re not.
If you’ve ever had issues with over or underpayment of your taxes, now is the time to change that.
Keeping accurate records means deductions and other paperwork is less of a headache and more of an opportunity to smile when you see how much you saved!
Annual Tune Ups for Finances
Tax time! Now it’s time to file your personal taxes, along with that Schedule C or, if you are incorporated, specific forms related to your business.
If you’ve kept up with your quarterly estimated taxes and have a handle on your profit and loss, you should be in good shape once April 15th rolls around.
But now is also a good time for some financial housekeeping.
Take the time to look at what you’re paying vendors. Are you still getting your money’s worth? And how about your own rates? Many companies give employees a cost of living raise.
It might be time to consider raising your own rates to keep up with the cost of living and with your ever-growing and evolving skill set.
Sure, financial tune ups aren’t as exciting as a spin in a Porsche. But making regular time for them will help you cruise down the road to success.
Do your business finances need a tune up?
Latest posts by Jennifer Dunn (see all)
- Financial Tune Ups: Routine Maintenance for your Business Finances - November 13, 2011