It’s tax season. I’m guessing that you reacted in one of two ways once you started seeing advertisements for tax preparation services.
One: *happy dance* “Woohoo it’s tax season! Can’t wait for my refund!”
Two: *eye roll / minor freak out* “I can’t believe it’s tax season already!! I don’t have a clue where all of my receipts are. God, I hope I don’t get audited!”
Does one of those sound achingly familiar? Me too.
As an entrepreneur keeping your business finances in check is incredibly important in maintaining smooth operations. Here are my top 4 tips for keeping your business finances under control!
Set Aside Money for Taxes
This one might sound like a no-brainer, but you would be surprised at how many entrepreneurs I talk to on the daily that don’t set aside money for taxes. If you’re a business, you should be paying your taxes quarterly. Don’t wait for April 15th to send in a boatload of money.
Set aside a portion of your income ( I recommend 30% to be on the safe side) and then send that money into the IRS quarterly. In all likelihood, you’re going to have tax write-offs and tax breaks that bring the amount you owe down, but better to prepare than be scrambling for extra money.
Do an Audit of Your Business
Did you sign up for a stock photo site that you never use? Are you paying for a course that you’ve never opened? Do an annual (or semi-annual) audit of your business expenses and see if there is an area that you can cut down or cut out completely!
As entrepreneurs, we can get caught up in the “shiny syndrome”, we find a cool new system or an amazing class that we just have to be a part of. The truth is that if you’re not using something in its entirety, then you’re basically throwing money down the drain. Either switch to something that fits your needs or cut it out of your financial plan.
Don’t get caught searching through shoe boxes of receipts to find that one thing you bought for your business. To make things easy on yourself, switch to a business credit card that you only use for business expenses. If you lose the receipt, no biggie! Go back to your credit card statement and see what you spent on that new keyboard drawer.
If you just can’t seem to part with your cash systems, get better at organizing your receipts and tracking your purchases. This can be as simple as using an excel spreadsheet and noting what you purchased and the cost. Scan your receipts and store them on an external hard drive to avoid losing all that paper!
Keep Track of Your Invoices
Billing isn’t done when the invoice is sent out. You have to follow up and make sure that your clients are actually paying. Have a plan prepared if your client doesn’t pay in your specified number of days. This could look like a late fee or simply stopping service until the account is paid up.
These are my top 4 tips for keeping your business finances under control! What is the most important finance tip to you and your business?