How to Keep Track of Your Finances During Your First Year of Business

managing personal finances for start-ups

The first year of your business is a critical time in which you will set up and refine a number of systems that will help you succeed, especially if your business involves estimating construction costs. Although you may have started out doing tasks a certain way, you may discover the need to adjust your operation for greater efficiency and better customer service. Whatever your business, you can ensure better management of your finances if you pay attention to these four areas.

Ensure Invoices Are Paid in a Timely Manner

Not all businesses receive payment at the time of service. If you create invoices that are to be paid at a later date, it’s important to ensure that these receivables don’t linger on the books as “unpaid” for long periods of time. Keep an eye on your accounts receivable figures and aggressively collect on unpaid invoices when past due. This action will help you to maintain usable capital for your business.

Review Vendor Prices Periodically

You may receive a variety of products and services from vendors that are necessary for the operation of your business. These regular expenses can sometimes increase without your being aware of it. It’s a good idea to review the prices of vendors on a quarterly basis to ensure prices are stable. And if they aren’t, it might be time to negotiate with the vendor for a more favorable price.

Reconcile Business Checking Accounts Promptly

The hectic pace of a new business can often hamper taking care of routine tasks like reconciling your business checking account. This omission can lead to problems when payments to your business don’t clear the bank, and you think you have more money in your account then you have. Put aside time to focus on your business account to ensure money has gone into the account as expected, and no unexplained withdrawals have taken place.

Adjust Your Tax Payments As Needed

A thorough review of your company’s income, expenses and payroll will provide information on whether you are making tax payments correctly. Small business software makes this task easy and allows you to increase your tax payments, so you are not hit with a large tax bill at the end of the year. Your accountant can provide additional information on taxes as your company grows.

The best financial management of a business involves regular attention to the data from your daily operations. When put together, this information can tell you where your company is doing well and where adjustments are needed. In this way, you can resolve problems immediately to ensure your company stays on profitable footing.

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