Starting your own business is hard work. Being a business owner is already filled with lots of to-do lists, meetings, and other activities, and the last thing that you probably want to think about is getting your books in order. For this weeks #TuesdayTip, we have compiled a list together of 7 pointers that every small business owner should follow to set you, your employees, and your company up for success.
1. Make Sure to Keep Your Personal and Business Finances Separate.
We know that being a business owner means that some of your business-based finances will combine with your personal money. We also understand that the last thing that anyone wants to do is have to sort through every single transaction to find the one business related transaction within the bunch. Do yourself a favor and make it as simple as it can be– open a separate bank account for all of your business related transactions.
2. Tidy Up Your Records.
When it comes to your books, try to keep them tidied up and in good shape so that you are not constantly wasting time looking through them for one thing in particular. Having neat and tidy books also means that less time is wasted searching and more time is spent doing whatever you or your business might need. Who doesn’t want to have more time on their hands?
Choosing to outsource your bookkeeping is another great option to help free up from time so that you can focus more on your businesses growth rather than books. If you are interested in learning more about SPB’s Bookkeeping Services, feel free to contact us here.
3. Keep All of Your Receipts.
Make sure to keep any business-related expense receipts so that you can claim them for any business purchases. Depending on what kind of business you are running, certain expenses can be categorized as business. For example, if you run your business from inside of your home, then you may be able to claim some domestic bills, too.
These expenses can range from stationary to laptops and computers. Always keep hold of any business-related purchases and file them in those neat and tidy records that we mentioned before.
4. Remember to Always Make Your Tax Deadlines.
Tax deadlines can be stressful, so taking precautionary steps to remind yourself of them is key. To make sure that you aren’t rushing to meet them, set a phone reminder, a calendar notification, basically anything that you have to do in order to not be scrambling at the last second. When you decide to take this step, your records will be accurate, and you can feel a sense of ease and forget about it until the next deadline.
To learn more about your states tax deadlines, visit the IRS.
5. Always Budget for Tax.
Just because you have a good amount of money coming in and you are making a good profit, not all of the money is yours. A good rule to follow is to always budget for this as you go along so that you aren’t shocked by it at the end of the year. If you have a savings account for your business, we recommend setting a portion of your income aside so that you can pay off your tax bill with ease come January.
6. Make Sure You are Aware of and Understand Tax Rules.
It is important to know exactly which tax rules apply to your business so that you are fully aware of which types of taxes you will actually need to pay. Income tax, National insurance, VAT and business rates, Corporation tax – make sure to do your research on all of them so that you know which ones you will need to pay.
To set up an introductory discussion with our tax experts here at SPB, visit our website here.
7. Create Profit and Loss Statements.
Using a P&L is crucial to the financial health of your company. This statement will summarize the costs, expenses, and revenues of your business during a specific time. It will include information such as your gross profit, net profit, operating profit, and your before-tax profit. This will make it a whole lot easier to show your revenues, costs, and how much profit your business has been bringing in.
Keeping these 7 tips in mind when managing the books for your small business will help you thrive. Say goodbye to last-minute scrambling to find what you are looking for!