Here Are Easy Ways To Organize Your Business Finances |
Here Are 10 Easy Ways To Organize Your Business Finances
Whether you are a new entrepreneur or a more experienced
business owner, taking control of your finances can feel like a part-time
job. Some simple tips can help you
streamline your time, organize your finances and reduce the stress of business
money matters.
1. Keep Your Bills in One Place
When the mail comes, make sure it goes in one place. Misplaced bills can be the cause of unwanted
late fees and can damage your credit rating.
Whether it's a drawer, a box, or a file, be consistent. Size is also important. If you get a lot of mail, use an area that won't
get filled up too quickly.
2. Pay Your Bills on Schedule
Bill paying can be simplified if it's done at scheduled
times during the month. Depending on how
many bills you receive, you can establish set times each month when none of
your bills will be late. If you're
paying bills as you receive them, chances are you're spending too much time in
front of the checkbook. Although bills
may state "Payable Upon Receipt", there's always a grace period. Call the creditor to find out when they need
to receive payment before the bill is considered late.
3. Read Your Credit Card Statements
Most people take advantage of low interest credit card
offers but never read their statements when paying the bill. Credit cards are notorious for using low
interest as bait for new customers then switching to higher rates after a few
months. Make a habit of looking at your
statement carefully to see what interest rate you are paying each month and if
any transaction fees have been applied.
If the rate increases or a transaction fee appears on your statement, a
simple call to the credit card company can oftentimes be beneficial in
resolving the matter. If not, try to
switch your money to a more favorable rate.
4. Take Advantage of Automatic Payments
Most banks offer a way to automatically deduct money from
your account to pay creditors. In
addition, the creditors usually offer a lower interest rate when you sign up
for this payment option because they get their money faster and on-time. Consider it as one fewer check to write,
envelope to lick and stamp to buy. Just
make sure you record the deduction when the automatic payment is scheduled or
you run the risk of bouncing other checks.
5. Computerize Your Checkbook
Using a software program is a handy way to organize your
finances. Whether it's Quicken(r),
Microsoft Money(r) or another package, these easy-to-use programs make bill
paying and bank reconciliation a cinch.
Computer checks can be ordered almost anywhere and fit right into most
printers. Once the checks are printed,
all of the information is automatically recorded in your electronic
checkbook. Furthermore, many banks have
direct downloads into these software packages so when money is deposited or
withdrawn, the transaction is entered immediately onto your computer. And, when it comes time to do taxes, it couldn't
be easier.
6. Get Overdraft Protection
Most banks have a service where, if you run the risk of
bouncing a check, the money will come from another source. For a nominal fee, the bank will link your
checking account to either a savings, money market, or credit card so the
embarrassment of bouncing a check will be avoided. Call or visit your bank to learn about this
convenient feature.
7. Cancel Unused Accounts
Whether it's a credit card or bank account, write a letter
requesting that the account is formally closed.
Not only will this improve your credit score, it is a useful way to
avoid money from being scattered all over the place. Don't let department stores and credit card
companies lure you into opening new accounts by offering favorable interest
rates and purchase discounts. It's easy
for credit to get out of hand by taking advantage of every credit offer that
comes your way.
8. Consolidate Your Accounts
If you have several credit card accounts with outstanding
balances, try to consolidate them into one.
Be careful and check the balance transfer interest rates and one-time
fees. Also, make a list of all your open
Money Markets, Savings, CDs, IRAs, Mutual Funds, and other accounts to see if
any consolidation can be done. Keeping
your money in fewer places eliminates all of the guesswork involved and reduces
errors.
9. Establish Automatic Savings
Create a link from your checking account into a savings
account that will not be touched. This
can usually be done through the banks and automatic amounts will be transferred
over each month. Most people will not
put money into a savings account on a regular basis. They may wait until a large tax refund check
arrives or some other event to actually deposit money into savings, retirement
or other accounts. If you establish an automatic
savings deposit every month, your accounts will begin accumulating money faster
than you think.
10. Clean up Your Files
Make sure your paid bills are organized in a filing
cabinet. Keep individual files for paid
bills. Go through your files at the end
of each year and throw out bills and receipts no longer needed for auditing
purposes. Contact your local IRS office
to see how long records need to be kept for audits. Usually federal tax return audits can be done
three years back but cancelled checks may need to be kept for seven. Consult the Internet for auditing and
records-keeping procedures for your state or region.
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