If you run a small business, then you need to have control over your finances. However, many times people believe they need an accountant for this. If you use the right tools and strategies, you won’t need one. If you arm yourself with the right data, you can achieve financial success in business, pay fewer taxes, and have peace of mind. Here is what you should know:
Without cash, you won’t have much of a thriving business. This might seem like common sense on the surface. However, few business owners really have a firm grasp on the concept of cash flow. It is about more than making money. It is about how much you have coming in versus going out.
For instance, if your sales are $100,000 per month, but your expenses are more than that, then all of the sudden you don’t have a profit to show for it. In addition, it means you have nothing left over to invest in other opportunities for your company. In order to improve cash flow, you need to keep an eye on it.
Have a running spreadsheet that you will add to every time you make a sale. And every time you spend money on the company’s dime, record that too. Eventually, you can see the average schedule you have for income versus what is flowing out. Then, you can start to manage it. But not before you measure it, as the legend Peter Drucker would say.
Think Outside of the Box
There is this idea in the mainstream that you need to use traditional financial tools in business. However, the last few years have proven that unique thinking can yield great results. Consider hiring a cryptocurrency accountant who can help you navigate the crypto industry and put your tax, revenue, and investment strategies into a higher gear.
Understand Tax Benefits
If you have a business, you can get certain tax breaks. This does not just include the new tax rules passed recently. It also includes expenses like office equipment, tools, software, and employees. Make sure you are not leaving money on the table.
For instance, every time you put gas in your car, you should ask yourself if you are doing it to improve your business. The same goes for travel. And if you work from home, you can write off a portion of your rent or mortgage based on how often you use it. Keep in mind that you must keep excellent records for these strategies to work. The last thing you want is the IRS breathing down your neck because you left out key documents in your tax reporting.
Get Someone to Keep the Books
You don’t need a genius to keep track of your profit and loss statements. Someone you hire online can keep accounts of your financial information. They might just do it weekly, monthly, or quarterly. Either way, having someone else to look at these numbers will give you the extra time to do what you truly excel at.
There are probably a few friends, or even enemies, in your market that you would like to emulate. Reach out to them if possible. If not, try to read between the lines. See what kind of financial strategies they are using and test them out with your business.
At the end of the day, the more you sell the more you have to play with. If your sales team is not putting up great numbers, it might be time for a change. Come up with a game plan that boosts quotas and brings your profits up to where they need to be.
When it comes to the finances of a business, every part matters. How you handle your affairs will make the difference between success and failure. So don’t fall behind on your financial modeling and strategies. Run your business like a pro by understanding the key concepts above. Then, your business and profits can grow immensely now and going forward.
Bio: Jeremy is a tech and business writer from Simi Valley, CA. He’s worked for Adobe, Google, and himself. He lives for success stories, and hopes to be one someday.