Written by Sara Vartanian, Editorial Manager for Mompreneur
Accounting probably rates as one of the least glamorous aspects of life as a small business owner. Tracking and managing finances takes time away from content development, engagement with our customers and other aspects of our businesses which we enjoy.
Many entrepreneurs simply ignore the accounting side of their business until they are forced to look at the numbers because it is tax time, they are looking to grow their business or assess whether their business plan continues to be viable.
6 Basic Accounting Tips to Help You
1. Maintain a Separate Bank Account
Whether you have self-funded your business or gotten a loan, keep your business transactions separate from your personal ones. Don't get your finances into a complicated relationship rather keep everything neat and organized.
2. Schedule Time for Accounting
Use your calendar to track when you have things due such as your GST/HST forms. Get a small basic expandable file folder and label the tabs to include your common expenditures (e.g., office supplies, shipping expenses etc.). Take the time weekly to place these in the correct slots.
3. Find a Professional
Hiring someone to help with accounting can seem daunting to many small business owners. Perhaps you don't want anyone to see the mistakes you have made or you feel like you simply cannot afford to hire someone. An accountant or bookkeeper should be able to help you get a better sense of your finances that in turn may save you money. Consider investing in your own business education by working with a professional even one time to learn how to efficiently track your finances.
4. Financial Forecast
Look at your numbers. What do you need to be making to continue in your business? Are investments you have made in advertising paying off in increased sales or do you need to go a different route? Predict what you will make per month by basing it on the minimum you need to make. Use this data to plan your time, marketing and budget. Reevaluate this plan often!
Just starting out? Do 3 years of financial projections to see if your business is financially viable. Things will change but it is a good idea to start with an idea. Do this before you make serious financial investments in your business.
5. Use a Software Program
There are loads of free or low cost apps and software to help you manage your finances. Ask other entrepreneurs for recommendations and take advantage of the free trial periods that many of these programs offer. You will surely find one that works for you.
6. Get Paid!
First, be sure you are getting paid by following up with invoices and clients (a great software program can help you here). Look carefully into the costs of different payment options such as accepting credit cards, Email Money Transfers or Paypal. Consider whether it is worthwhile for you to pay a monthly fee or a fee per use basis. This will depend on how often you are billing.
Money matters and you need to be regularly considering what is working financially in your business and what isn't. As an entrepreneur, you must become at least somewhat comfortable with your numbers or be willing to outsource to someone who is.
Sara Vartanian is the Online Editorial Manager for Mompreneur Showcase Group Inc. She is an eco-savvy entrepreneur at changeMatt educating moms to take baby steps to lead green lives, connector of mompreneurs in Toronto, and a mama to two gorgeous little boys.
Mompreneur® Showcase Group Inc.
Mompreneur® Showcase Group Inc. (www.TheMOMpreneur.com) is the trusted national network that supports, educates, and empowers moms in business across Canada. With close to 20 satellite locations in Ontario, supportive networking groups are now expanding to other provinces in order to connect business women everywhere from East to West of the country. Company highlights include over 10,000 members, presentation of the "Mompreneur® Award of Excellence", and the re-launch of MOMpreneur® Magazine. Contact Head Office for further information on licensing or becoming a member:
Founder & CEO, Mompreneur Showcase Group Inc