How To Set Up Your Business For Major Financial Success
Do you ever feel like a hamster on a wheel when you’re organizing your finances? It can be a never ending process since financial transactions happen daily in your business.
If you’re like most creatives, just the thought of bookkeeping sends you running for the hills. You’d rather stick to art instead of analytics. Plus, you just don’t have the time to figure it all out.
Well, I wanted to share a couple tips to implement now that will ease the stress of your mounting receipts. You’ll be one step closer to seeing real organization in your business finances if you do these things and do them consistently.
Establish separate checking and savings accounts
You need a bank account with a debit card and maybe a checkbook. You'll use these accounts for every single transaction associated with your business. By the same token, you will not pay for any personal expenses using these accounts.
Mixing business and personal expenses makes everyone’s job harder, so just don’t do it. It takes time to sift through transactions to determine which are valid business expenses. Not only will you pay for it in additional service charges from your accountant, but it can also cost you valuable tax deductions and open you up to personal liability.
Sign up for accounting software
While that spreadsheet might seem ok at the start of the year, it’s not nearly as fun after you’ve amassed over a hundred transactions and need to categorize them for your tax return. I recommend accounting software for all creatives. The most popular options are cloud-based. You can invoice clients and update transactions from any computer or mobile device and even give your accountant remote access. Even if you only have a few transactions a month, it’s best to familiarize yourself with the software now when you have the time.
My absolute favorite accounting software to recommend for new service-based entrepreneurs is Wave. My other top recommendations are Quickbooks and Xero (for products-based businesses). Knowing your numbers is the basis for good decision making in your business, and these two tips will get the right foundation set for you to get and keep your business finances organized.
Interested in trial access to any of the software apps I mentioned? The links above are personal invitation links. When you sign up, I may receive a small commission or bonus features for my account. I use all three of these software apps for either myself or clients, and I recommend them without reservation.
Since knowing your numbers is the basis for all good decision making, I hope these first few steps get you off to a great start organizing your finances.