The Importance of Keeping Track of Business FinancesDec 28, 2021
If you're an entrepreneur, then you know that keeping a close eye on your business finances is essential. But it can be tough to know where to start. This blog post will give you a few tips on how to keep track of your expenses and make sure your business is staying profitable.
The first thing recommended is to not bury your head in the sand. No matter what stage you are at, the start or further along the business journey. Keeping track of business expenses is finance 101. Ignorance will not make the headache disappear and it's a waste of time to try and remember every purchase or invoice from the past.
There are many software packages that offer revenue and expense tracking. If you don't want to spend money on software there are also many free applications and you can run a basic spreadsheet through Google Sheets or Microsoft Excel.
Too often entrepreneurs are pushed into fancy applications that they don't understand and end up not doing the work to stay on top of their finances due to these platforms being overwhelming. Ensure you choose the one you are comfortable with and know you will want to sit in front of on a regular basis.
Remember, finance is finance, no matter what industry you are in.
Here are three valuable points:
- ensure there is Revenue coming into the business
- watch your Expenses are not too heavy
- make sure your business is staying Profitable
We also want to ensure our financial goals are in place for our business and reassessed on a semi-regular basis. This could mean every three or six months, and sometimes annually is ok.
If you do prefer the annual method, ensure you check on it as close to the end of the period as possible. The last thing you want is to be looking back 6 months on those figures, find you needed to make changes and so much time has already lapsed.
This is a very important process that will help any business owner keep track of where they are and how to move forward. Finance is the backbone of every business, so take these steps seriously! And be sure to revisit this blog post as your business grows and changes.
Having a financial budget can be a great addition to your business tool kit. You can find a lot of templates online, or if you have an accountant they will likely be able to help you out as well.
When creating your budget, it's important to make sure that the numbers reflect what is happening in your business. For example, if your business is seasonal, then your budget should reflect that. Or if you're starting a business that is new, then you will want to factor in time for the business to be built.
Remember above everything else, Don't Fear Your Finances!
Thanks for reading! Cheers ☕ Kerry