4 Tips For Taking Control Of Your Small Business Finances
Before we get started, let’s be clear - I am by no means a finance guru. This is what I have learned through trial and error, and error, and more errors. I have made many mistakes and heres my tips so you can skip the headache of doing the same! I hope it helps!
1. Separate your business finances from your personal finances
This may seem totally obvious, but when you are starting your own business and you’re the only employee it’s easy to mix the two. I did this for about an entire year and had to keep a lengthy spread sheet about where and how much I was spending money for Dope Rope. I would suggest creating a separate bank account. It doesn’t even have to be a “business account,” just create a separate account where you can put all your company’s earning and draw from to take care of expenses. Or, apply for a separate credit card dedicated to business spending.
2. book keeping
I’m not going to lie, this was the hardest thing for me to understand. Last year I kept a spreadsheet keeping track of everything I earned and spent, but it was messy and hard to keep up with. This year, I starting using Quickbooks Self- Employed and it has been an absolute game changer. There was a little bit of a learning curve but it was totally worth it. The software takes your transactions and categorizes them for you. If you make the same type of purchases over and over again you can even apply rules so the program auto categorize for you to save time. Using the app has made my life SO much easier. It even calculates your quarterly tax payments so you don’t get screwed at the end of the year.
3. Paying Quarterly Taxes
The biggest issue for freelancers and the self-employed people is being shocked by the huge sum of money owed at the end of the year. If you work for an employer, your taxes are automatically taken out of each paycheck so taxes are a breeze come April 15th. It’s definitely a different story for us lady bosses. When you start paying your taxes quarterly it really helps take the stress of. Again, Quickbooks Self-Employed has been extremely helpful in helping me determine how much I owe.
4. Put money aside for you taxes
Quarterly taxes won’t be doable if every 3 months you are scrapping together cash to make your payments. I set up a separate savings account so every month I can set money a side thats reserved for these payments. Quickbooks Self-Employed lets you link up your Etsy account, credit cards, and bank accounts so you can keep track of all your finances and payments.