TORONTO, ON / ACCESSWIRE / September 23, 2024 / Starting a new business is an exciting time, but managing finances can feel overwhelming. How you handle your finances in the early days can set the stage for your long-term success.
Here are some things you can to do manage your new business finances and build a foundation to grow your organization.
Create a detailed budget
To manage your finances, you need to know your goals, income, and expenses. Create a detailed budget including:
Revenue
Expenditures
Financial goals
Review your income and expenses to ensure they're in line with your budget. If they aren't, you may need to find ways to cut your costs or increase your revenue. Make sure to account for upcoming expenses. You may have expensive business purchases in the next year or two that you need to start planning for now.
Track every expense
Thanks to cloud technology, many budgeting and expense-tracking solutions make it easier to collect and store your receipts. You can even use online accounting systems to:
Pay bills and invoices
Purchase supplies
Manage payroll
Create reports to analyze your spending in certain categories
Reconcile accounts
Categorize expenses
Separate business and personal finances
It's crucial to separate your business and personal finances. Not only will it make life easier come tax time-especially if you're subject to a Revenue Canada audit-it will help you manage your cash flow, track your business expenses, and create your budget. As your business grows, having separate finances will become even more important.
Business bank accounts are geared specifically to businesses. You may have access to accounts with no foreign currency fees, increased transaction allowances, and employee pay processing. Additionally, for new businesses, a business bank account begins to establish a financial history, which can make it easier to get a business credit card, loan, or line of credit.
With that in mind, business credit cards for new businesses are also an important financial tool. They help you manage your cash flow, build your credit history, and keep your personal and business finances separate.
Reduce unnecessary costs
Take time regularly to review your expenses. These days, with so many monthly subscription offers available, it's easy to sign up for a variety of services only to completely forget about them. Or you may sign up for a higher level of service only to discover you only need a lower level.
Each quarter, review all your expenses to determine whether you're using the service and whether you need to pay as much as you are. Look for ways to decrease these costs by eliminating anything you don't use or decreasing the costs of goods and services you use less than you thought you would.
Plan and save for taxes
When you run a business, you're responsible for ensuring your business taxes and income taxes are paid. It's important to set aside money for your taxes, so you don't wind up paying interest on the amounts you owe.
As a business owner, you're eligible for tax deductions. Make sure you understand what expenses can and can't be deducted from your taxes. It might be wise to consult a professional, who can guide you on how much money to set aside, what you can and can't deduct, and how to manage your finances.
Final thoughts
If you set up solid financial systems in the early stages of your business, your finances will be much easier to manage as your business grows.
CONTACT:
Sonakshi Murze
Manager
[email protected]
SOURCE: iQuanti