Simplify Your Finances: Business Vs. Personal Accounts
One of the easiest and most effective ways to simplify your finances is by separating business and personal accounts. Discover the benefits, tips, and actionable steps to improve your financial management and boost business efficiency.
Blog Post #104Managing your finances efficiently is vital to your ongoing success. However, I’m sure like most business owners, running your business and making the money is most likely at the top of your list.
So, how do you make managing the money a priority as too? By making it as simple as possible!!
One of the simplest (and most effective) places to start is by separating your personal and business accounts.
Sounds so easy right? Well, you may be surprised how common it is for business owners, no matter how long in they’ve been business, still commingle the two.
If this is you, no worries. You are not alone, but it is an important and easy strategy you can implement starting today.
Benefits of Keeping Business & Personal Accounts Separate
Easy Bookkeeping: Mixing personal and business transactions can create confusion and wasted time. By keeping your accounts separate, you make it easier to keep up with and track your business activity.
Straightforward Financials: Know exactly how much you are making in your business and keep personal spending separate from business costs. This allows you to manage your budget, cash flow and plan effectively.
Better Financial Insight: A clear picture of your business's performance and financial health, allows you to make better business decisions for future growth.
Smooth Tax Preparation: When it's time to file taxes, having separate accounts saves time, reduces errors and can maximize your deductions. All your business transactions are together in one place, simplifying your record-keeping and document process. Your tax professional will love you!!
Audit Protection: Since audits can happen at any time, having clear separation of your finances is crucial to be able to quickly verify business without personal things scrambling up your records.
4 Ways to Separate Your Finances
Use Business Bank Accounts:
When you use business bank accounts you give yourself a clear path for getting paid and taking care of your business obligations. There’s so many options for business banking these days, so my advice is always look for a bank that offers features most beneficial for your needs.
A favorite of mine is Relay Bank. They provide easy-to-navigate accounts that are designed with business owners in mind and they make it seamless for you to work with a finance professional when needed.
Having dedicated business accounts allows you to have control over your cash flow and ensure your business is set up for success..
Setup Business Merchant Accounts/Payment Services:
Using merchants accounts is great for handling customer payments and even for paying for some of our own expenses. However, commingling these can cause some major problems.
I’ve worked with many clients who have over and under-stated income (which can cause a whole other world of problems), missed out on available tax deductions, and more. All by using their personal Cash App or PayPal for business transactions.
These are probably some of the more simple accounts to set up as long as you have the right documentation.
Utilize Business Credit Cards:
Using business credit cards helps you manage your cash flow better, keep spending under control, and ultimately build credit for your business which can be used for many other benefits when needed.
Some popular biz credit cards include Capital One and AMEX, but I’m sure your business bank has one for you. Having a business account with your bank usually helps your credibility with them.
Get Loans & Lines of Credit for Your Business:
Loans and credit lines can help with growing your business, cash flow management and more. Open these as business accounts to protect your personal credit and build your business’s credibility.
Action Steps for You
Add simplicity to managing your business finances.
Here’s how you can start today:
Choose a bank that fits your business needs and open accounts you need for your business. It’s always good to start with a checking and savings
Setup business accounts for all your merchant & payment services
Review your subscriptions and recurring payments for your business and make sure they are paid from business accounts
Create a documented reimbursement plan in the case of having to use personal accounts for business transactions.
In Summary
When your financial management is simple, you are more likely to stay on top of it. Separating your personal and business bank accounts is an essential step. It not only helps with effortless record-keeping but also aids maintaining clear records and making better business decisions.
Need help getting your finances together? Let’s Talk…
Your Finances Organized, Why Important?
Blog Post #102
Your Finances Organized, Why Important?
“Organization is Key”
Sounds pretty cliché right?
And although it might, truth is, organization is one of the key foundations for success in your business.
Having an effective, organized financial system ensures the money operations of your business run efficiently and smoothly on a consistent basis. This includes your bookkeeping processes, how you manage your financial activity and even how you store your data.
As you read through the list below of ways you can implement more organization into your business life, you will see it goes a little deeper than picking out colorful file folders for storing paperwork.
Now, if you’re a natural tidy person, this may come easy for you, but for those that need a little assistance in the “neatness” of things, no worries, I’ve kept them simple.
Use Accounting Software.
This is how you keep everything in one place. You can easily track revenue and expenses from all your business accounts without needing to search through different spreadsheets, or multiple documents.
Separate Business and Personal Finances.
Keeping your business from your personal is a lifesaver. You find it best for keeping your business activity organized, easy to manage, and accurate for tax prep reporting. You should have separate banking, credit cards, merchant accounts, etc., if you can get a business account for it, do it!!
Create a Tracking System.
You need an organized way of how you will manage important documents like receipts and invoices, and a detailed process for collecting payments from customers, and paying vendors and expenses.
When it comes to your filing system, in my opinion, digital is best, but whatever way you choose for your liking, you just want to make sure you organize things in a systematic way. Use categories and groups for different types of documents and any records you need to keep record of.
Make and Stick to a Schedule.
Take the time create a weekly schedule and STICK to it! This is the time you will dedicate to managing your tracking system. If Friday is when you want to pay your Vendors, only pay your vendors on Friday. Having a schedule not only keeps you organized as the owner but also sets a level of expectation for your customers, vendors, employees, etc.
You also want to set a dedicate a day monthly to reconciling accounts, reviewing reports and financial statements.
Maintain a Budget.
Your budget organizes your expected revenue and costs. This is important in helping you manage cash flow, which is a vital. Having a budget helps you organize how much you need to allocate to each area of your business and when to expect changes in your normal flow of spending and profits.
It’s important to remember that organization is part of your foundation. It helps create stability which can lead to ongoing success. And if it’s something you just can’t find the time to make a priority, make sure you get the expert help you need to do so!! It’s an investment (either from your time or money) that you won’t regret.
Best & Savviness Always,
Bria G
5 Simple Bookkeeping Strategies for Business Owners
Blog post #101
Five simple bookkeeping strategies for business owners.
As a business owner, especially when operating as a solopreneur, keeping good financial records is a must.
It is not only an IRS requirement, but it’s the only way to guarantee you are making the best decisions for your business.
Staying on top of your bookkeeping is the best solution to this, and although yes, I know, it can be a menacing task, having the right strategy to execute will help it become seamless.
In this post I’m giving you 5 simple, yet effective strategies to ensure your bookkeeping processes run smoothly, efficiently and allow you to properly manage your business performance now and for the future.
Set a weekly date for your bookkeeping tasks. Choose a day each week when you will record transactions, review banking activity, send out invoices (and review any outstanding ones), and track expenses.
Make sure it’s the same day of the week though. Consistency is key for it becoming a habit. This way it’s no longer a chore for you, but a part of your business operations.
You should also implement an end of month process. This ensures all financial transactions have been accounted for, help you plan for the month ahead, and stay prepared for quarterly and year end tax filings.
Reconcile your accounts each month. This will ensure accuracy of your accounts, financials, and reporting. You will also have better insight into your business patterns and what you need to do to keep your finances in order.
This should be a part of your month end process.
Review reporting regularly. Analyzing your reports helps you uncover any issues as they happen, provide information needed to make informed decisions like cutting costs and increasing revenue. It also keeps you on track for reaching goals.
You should set time for monthly and quarterly reviews, to ensure that your finances are always accurate, current, and organized. This should also be a part of your month end process.
Keep watch of your cash flow. Consistent tracking of your revenue and spending gives you clarity of your money trends. This allows you to better manage your money for savings, tax obligations, operating expenses, budgets and the most important of course…PAYING YOURSELF!!
Hire a bookkeeping professional. It’s no secret that finances usually get pushed to the back burner when you’re busy operating & growing your business. And if your business isn't bookkeeping, it's just not something you usually want to do.
Hiring a professional is the best way to keep you on top of all the strategies mentioned above and even more.
Managing your finances is, if not THE most, one of the most important parts of running your business successfully. Having well-structured bookkeeping strategies and processes is key in keeping track of and continually improving it’s overall performance.
Best & Savviness Always,
Bria G