So, you are now a business owner. Congratulations for taking the leap!
As scary and lonely as it may sometimes feel, always remind yourself why you took that leap in the first place. Just keep on doing the work and surround yourself with positive, like-minded people.
Setting up proper systems is a great way to streamline operations from the get-go. Sound procedures also help save you time, which as any entrepreneur will tell you, is an invaluable resource.
Here are ten ways to make sure your finances are in order – giving you peace of mind and more time to work on other aspects of your business:
Don’t delay your bookkeeping and tax functions. Many entrepreneurs put this off until their business has grown but this simply adds to their “must-do” and can be overwhelming and expensive in the long-run.
Review your monthly profit and loss statement to ensure that your business is profitable.
Make use of cloud-based accounting software but be wary of hidden costs or non-recognised programmes. Implementing this early on in your business will help simplify your life. In fact, some cloud-based accounting programs even have Apps so you can use your phone to draw up invoices, quotes etc.
Whether you are a Sole Prop or a Registered Business, overdue tax submissions may result in penalties and interest. In both cases, you will need to submit your Personal Tax Return, and in the case of a Registered Business you will have to submit a Corporate Income Tax Return as well. Your bookkeeper or tax practitioner will be best able to help you with this.
Remember, if you require any form of finance, banks or creditors will always ask for your Financial Statements. If you only realise at this stage that your business was not operating profitably, you cannot change the results. If you become aware of this sooner, you can look at cost-saving or increasing your prices.
If you cannot measure your finances, you cannot manage it.
Use two separate bank accounts for personal and business expenses. Pay yourself a salary!
Just remember to always aim to reflect profitable business (Sellable business). You may want to expand your business by buying a vehicle, stock, property etc., and you will need to show that you are making profit to apply for these loans or credit.
Remind yourself to not get side-tracked or spend money on the “stuff” that does not add value to your business.
Get expert help. The entrepreneurial journey can be daunting and overwhelming, but you don’t have walk the path alone. There are a range of specialists whom you can work with to help lighten the load and help you make informed choices. Accountants, business coaches and attorneys are good people to have in your camp.
Sonja Jordaan is from SimpliFinance Solutions. She can be contacted at [email protected]
