9 Tips for Organizing Your Business Finances

A comprehensive business finance plan includes budgeting, accounting, future prediction, tax planning, and risk management. 

It’s important to analyze your business’s accounting reports and financial statements from time-to-time to gain proper insight into your business’s performance. This will allow you to set the right financial goals, whether that’s to invest more money in your business (for expansion, buying new inventory, or hiring staff) or to save for retirement.

Avoid common tax mistakes with organized records and bookkeeping. The best way to avoid tax stress is to be prepared. In addition to understanding tax deductions, you can also learn how to lower your tax burden as a business owner.

Putting together a budget can not only completely change how you manage your business finances, but it can also help you achieve revenue goals sooner than you’d expect. A budget can assist in forecasting the revenues your business will generate and even identify unnecessary expenses. 

Ideally, you should create an operating budget that shows you the projected revenues for the financial year. Even though this is only a high-level summary, it includes all the essential details about your business’s costs and operating expenses. 

Think of the operating budget as a tool that tells you whether your expenses are on-point per your plan. Next, focus on a cash flow budget to keep track of money going out and coming in. Doing so will ensure you know your business's liquidity position.

Corporate credit cards aim to solve the hassles of digital spending for businesses. They increase the company’s purchase power while also improving the cash conversion cycle. 

With corporate credit cards, you also get a higher credit limit than with personal ones  — plus you’ll  be able to take care of all your business expenses without affecting your personal liability. 

Apart from helping manage business finances, corporate credit cards make compliance and reporting so much easier for growing businesses  who need to focus more on core business goals. 

Obtaining small-term financing, or a line of credit, is another tool to help you manage your finances and ultimately grow your business. 

When you own a business, a line of credit can help you tackle several short-term funding requirements, such as maintaining inventory, salary payments, or addressing new orders. Having access to a line of credit can also help you control your cash flow throughout the year

While ensuring steady cash flow is important, you also need to think about the best ways to streamline your payroll process. 

Choosing the right payroll software is an easy way to ensure salaries are directly deposited into your employee’s bank accounts. 

Simply put, a direct deposit helps to manage cash flows better. You not only eliminate the chances of different employees depositing their checks at different times, but you can also prevent yourself from accessing funds in your account that are allocated for outstanding checks.

Mixing business expenses with personal finances is the perfect recipe for disorganized records. 

Not only does it make it incredibly challenging to keep track of money received and money spent, but it can also result in overspending as you may end up using your personal funds for business expenses and vice versa. Moreover, a clear separation of personal and business finances is necessary so you can claim tax deductions for various business-related expenses.