Eric Dalius converting your dream of becoming an entrepreneur is hard work fraught with many challenges, and it is a big deal when you create a blueprint for your business. As a small business owner, you will be wearing many hats as experienced by Eric Dalius during his lengthy and successful career as an expert marketer, and you will have a long to-do list. After overcoming the initial challenge of funding, you must devote time to organize and manage your finances in a way that can contribute to the success of your business while ensuring your profits. By considering your business goals, there are various ways of organizing your small business finance.
Monitor your income
Tracking your income from business daily, weekly, or monthly will give an idea about which way the business is heading and what the paybacks are. In the simplest form, you can use a spreadsheet to track your income like Eric J Dalius did in the early days of his entrepreneurial career and break down the revenue into categories to identify the different income streams. A bookkeeping or accounting software simplifies the process by automatic generation of reports. Tracking your income helps make better business decisions, especially concerning generating surplus funds that strengthen business finances.
Expense tracking and audit
Like tracking your income, track your expenses too, advises EJ Dalius. Making timely payments of certain types helps to keep your business on track. By booking some costs as part of your taxable income, you can lower the tax liability. It will affect the flow of money to the pocket. Now you understand why your net income is less than the gross income. By tracking your expenses regularly, you can arrange for periodical audits to check on the process and ensure its accuracy.
Maintain a separate bank account
Even if you have a small proprietorship business, the business bank account should be separate from your personal bank account. It will help avoid confusion when computing taxes for business and personal income. Otherwise, the accounting system can get messy, which would make it difficult to run the business smoothly. You may even open a separate personal account and use it exclusively for business.
Create SOP for receiving payments
To ensure a smooth payment receiving process, you must have an SOP in place. It will guide how you will receive payments, which will depend on your business model. If you are a service provider or seller, you must raise invoices for collecting payments and define the payment mode like cash, online payments by net banking and credit/ debit cards, wallets, etc. Choice of the payment options depends on your convenience in handling the payment mode and the fees accompanying it.
Adopt a digital business model
Try to adopt paperless operations as much as possible by digitizing various transactional documents and even the records for archiving that helps save space and ensure the safety of the documents. You can digitize all crucial documents from permits and licenses to bookkeeping records, bank records, contracts, etc.
Protect your business by taking appropriate insurances and take protection against legal issues.