The more you plan, record and take action to control your financial transactions, the more likely your business will have a solid foundation to ensure success. If you do not naturally lean toward monitoring your finances, then it may seem overwhelming. I recommend using simple, web-based tools and concepts to establish a system to manage the finances of your business so you can improve your strategic plans and make more calculated and relevant decisions each business cycle.
Maximize the tools available by linking them together to share information and to create decision significant reports. Having your current financial reporting in one place will help you improve profitability and make better decisions. Daily snapshots and monthly financial statements will help you to determine your financial health and to strengthen your strategy in the future.
Five step checklist to improve the management of your business financial transactions:
- Use your business bank account for every transaction. Ensure that all revenues and expenses are received and paid through the business account at your bank. Automatic payments are deducted from this account along with all receipts being deposited.
- Don’t co-mingle accounts and transactions. Ensure you are not using a personal credit card to pay business expenses. You will waste time looking for that receipt at the end of the month when you are reviewing your profit and loss statement or when you are ready to complete your taxes. Missing expenses will derail your effectiveness and your bottom line.
- Use online software for accounting, payment processing and invoicing. I recommend using on-line tools such as Quickbooks, Freshbooks, Square and others to track your expenses, accept credit card payments and send invoices. (I have used Quickbooks and am considering Freshbooks. Amy Porterfield is currently sponsored by Freshbooks and offers a code. Listen to her podcast and see her site for details. Click here for her site. I also currently use Square.) It will make your life easier by having a simple, automated system in place to manage your money better. Additionally, you will be able to track receivables and payables to manage and plan the flow of cash in and out of your business.
- Link all tools to ensure transactions are recorded and tracked. You can link your bank account to the online accounting software so that transactions can be easily downloaded and categorizes for your monthly financial statements. Additionally, there are usually third party applications that can be integrated to more easily analyze transactions. Your website commerce solution can be integrated with your accounting software so that financial data can be shared automatically.
- Embrace analytics to determine trends. Most online financial software services offer analytical tools to better understand your customers and financial trends. Analytics can take guessing out of figuring out behaviors in your business. Maximize every insight to improve your business processes and products to increase profitability.
Establishing a system to track and organize your financial transactions will help you understand how your money is being earned and spent. You will be able to make better decisions and where to focus. Small business owners tend to overlook and lack a system for managing their receivables and payables, but when timed and managed well, you will improve cash flow and maximize long term opportunities.
“Beware of little expenses. A small leak will sink a great ship.” -Benjamin Franklin
How will you better execute financial transaction tracking and analyzing in your business?
Please comment or email me at comment@stephenmclain.com.
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Copyright 2017 – Stephen McLain