Spring has officially sprung, and while you might be busy cleaning out the cobwebs and dust bunnies at your home, it may be time to focus on cleaning up your business too. In particular, reevaluating your business finances around this time of year can help your business stay on the right track. If you need some help on where to start, here are 10 tips to get your business finances in shape.
1. Analyze Your Finances
Take a good look at your finances, with a goal to be bigger and better for the rest of the year. Run reports from your software program and take a look at where your company stands. Are you doing better or worse than you thought? Try to get a handle on the debts that your company may have; pay off any outstanding debts you can, or negotiate payment plans. Compare your business debts with your receivables list. Make notes on the good, bad, and downright ugly things that you need to work on before year’s end.
2. Work on That Receivables List
There is no business that has their receivables list at 100% paid unless they are a cash-up-front operation. Do you have customers that owe you money? If you do, then now is a good time to start collecting. You do not want to let your accounts get beyond 90 days without some sort of action. Statistics show that accounts that go beyond that 30-60-90 day window are not only harder to collect, sometimes they are impossible. It may be time to send those collections out to a company who can focus on collecting.
3. Get Your Records in Order
You probably have a stack of documents to file that would rival the Eiffel Tower in height. However, spring is a great time to file all those invoices and receipts away, and empty the tray. Even if next year’s tax season seems a long way into the future, there is no better way of making sure you’re prepared ahead of time than having everything filed in the right spot.
Some businesses work on the credit system. This is where they order products, then sell it and reimburse the manufacturer. Unfortunately, sometimes we order too much or not enough. While most owners are quick to get on the phone when they do not have enough, it is harder to return things for a credit. If you have any merchandise sitting around that you can collect money from, return it and get the cash.
5. Balance Checking Accounts
Balancing your checkbook is one of the most mundane chores ever invented. However, it is essential to ensure that there are no outstanding checks that cannot be accounted for. This is especially true if you do not use a software program and write checks by hand. Some people do a simple balance daily while others wait until the end of the month to make sure the checking account has in it what it is supposed to. The last thing you want is to write checks that will bounce. It can be a costly blunder.
6. Set New Goals
While most people wait until the end of the year to set goals for the New Year, spring is a great time to do some planning. Since we’re almost at the halfway mark for 2016, re-evaluate things like your copier lease to see if you need it for the next year. Look at your incoming receivables and set targets to increase your revenue in the next quarter.
7. Do a Mock Year-End Run
If today was the end of the year, where would your company stand? Try doing a mock run as if it were time to do taxes. Do you have all of your deductions backed up with receipts? Make sure to have a firm plan in place for the end of the year taxes. You will thank yourself later.
8. Upgrade Accounting Software
Most companies have some sort of accounting software unless you are still relying on an old-fashioned ledger and pencil. Software companies do updates just about every year. Have you updated your accounting software lately? These upgrades can provide you with important things that can be beneficial to your company. Take a minute and make sure you have the latest edition. You may also need to get a whole new program. Sometimes people start out with free services only to find that as they grow they need something much better.
9. Ensure All Quarterly Reports Have Been Filed
Have you filed all the quarterly reports for your business? The first quarter of the year is officially over, and the second will be over before you know it. Have you paid the taxes? You do not want to pay any penalties for not paying your taxes on time. Make sure to get all your reporting done if you have not already.
10. Set Accounting Dates
To hold yourself accountable for your finances from here on out, schedule yourself a date on the calendar for bookkeeping. Make sure this date is a time that you can sit down and look over everything. You will need at least an hour or two, depending on the size of your company, to make sure that you can file, write checks, and do financial projections for the next week. You need to make sure you hold to this time slot, and do not put off your finances.
When you own your own business, it can be very difficult to wear many hats. There are daily demands that pull you in a hundred different directions. The finances are too important to neglect. You want to make sure that everything is done right because any errors involving taxes or things of that nature will only come back to bite you in the end.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes forCheckworks.com, a leading supplier of personal and business checks.