Have you ever found yourself scratching your head trying to remember where you spend that specific sum of money? You might be paying all your bills the day they are due and be very careful about depositing your checks and getting notifications on your withdrawals, and yet money you are earning does not match the money you have and you are spending. Now you can either accept not knowing forever, or secretly resent your employees for skimming on you, or plenty of other undesirable things you wish you didn’t have to think or do.
Losing track of money is not only significant for mental peace. There are very real financial consequences. What if you get the opportunity for an exciting and lucrative investment but you are not sure if you can afford an investment? Or more gravely, what if you commit to an investment only to find later that your cash reserves do not allow you for such a spent? So today we will look at top five tips to better organize your finances and keep track of what you earn and what you spend.
Personal and Business Finance Don’t Mix
When we say they don’t mix, we don’t mean that “you cannot” take our money from your business for your personal expenses. We are saying “you shouldn’t”. It might appear very convenient to just use one bank account or one credit card for all your daily expenditures, but this one convenience holds the possibility of an utter disaster for your business finances. In layman’s terms, you shouldn’t be spending your revenues rather you should only be spending your profits. However, if you won’t keep the transactions separate, you might not even realize that you spent your precious business finances on a very expensive and not so delicious lunch.
Don’t Leave Things to Guesswork
Procrastination rarely benefits, unless you are writing a novel and with the delay comes a better twist idea. But it is especially harmful when it comes to recording finances. We might be confident that we will remember every detail of every expense we have made, but before you know it you would forget it. If you want to be successful in managing money and avoiding headaches over reconciliation later, get yourself a mobile app, or better a financial ledger software and record all your revenues and expenses in real time.
Invest in Accounting Software
Quickbooks, Xero, Freshbooks and so many other software options are available for you to keep your finances in check. If your business is growing, chances are that it is not just you or another individual making business expenses but several different people are bringing and spending money during the course of operations. You also need to realize that money management is not only about hard cash. You have to log your revenues and spending even without any actual exchange of cash or cheques. Might as well save yourself the trouble of trying to find out at the last moment which cheques have been cashed and which sales have been realized, and update every transaction as it happens.
Make a Budget and Stick To It
Organization without discipline is perhaps more harmful than disorganization with discipline. You need to decide at the start of the month – or any financial period that suits your business – on how much you can afford to spend. Then reconcile it with how much you expect to earn. However, it is always better to treat expenses with more surety than revenues to keep yourself safe from going illiquid or even bankrupt. Budgeting does not mean you have to keep track of every dollar, although with a good software that is entirely possible. Budgeting means to know what to spend on and when, and where to expect the bigger payoffs and where to be cautious. In practical terms making a budget and staying true to it means making financially sound decisions and remaining clear on the objectives of the business.
Let Experts Take Care of Everything
Now if reading the above points made you feel like it is a lot of work to get all this accomplished on your own, you might be correct. Managing money is often a tedious and risky job, which if left in the hands of the inept can spell disaster for any business. This is why outsourcing companies, such as Intersoft BPO, offer all encompassing financial and accounting services, so you get all the benefits and none of the worries. We have expert professionals who keep all your bills in one place, use state of the art financial applications and software, keep meticulous records, and also provide you regular and periodic updates on your finances. One of the highly underrated benefits of having an outsourcing company on board is the advice and guidance you get on managing your money and investing it better. Why lose on such an excellent opportunity and that too when it comes at a minimal cost?