At the end of the day, a business can only ever be successful if it earns more than it spends. This is a bit of a depressing thought, but it is also vital that all business owners understand this, and do all they can to stay on top of their business finances. And, the upside is that even if you had a bad year last year, you can learn from your mistakes and do it better this year (read here how I cut some of my blog expenses this year).If you are new to running your own business, or just setting up as a freelancer, being able to keep track of your finances is the best way to know where your business is up to and to make a plan for success. Even if you haven’t got any accounting experience, it is possible to learn how to manage your business accounts yourself.
All you need are a few simple pieces of advice.
Use Business Accounting Software
If your business is just you and only a handful of clients, you might be able to make do with a simple spreadsheet to note your incomings and outgoings each month. However, if you have employees and a more than a few clients, business accounting software will make it much easier to track your finances as well as project into the future.
You can also use this software to print checks and if you use quickbook checks, you only need to buy a single type of multipurpose check that you can edit before you print. This is especially useful if you employ freelancers who will expect you to pay them in regular instalments by check.
Set a Clear Budget for Every Month
When you are setting your business goals, it is important that you also set some financial goals on a monthly and a yearly basis. These goals should overlap and everything you do will help towards achieving them.
The best way to set business goals is to be specific about what you want to achieve, be realistic about what is actually possible, but also be optimistic and push yourself to do more. You might not end up achieving absolutely every goal, but if you give yourself a chance to reassess every month, you will definitely track your progress and have a better frame of mind.
Cut Costs Wherever You Can
Of course, the simplest way to stay on top of finances is to be thrifty about your expenses. Never pay a bill without questioning it, always shop around for a better deal and think, do I need this to succeed? before you buy anything. There will always be some costs that are just expensive, but the more you get used to negotiating better prices and searching for better deals, the easier it will become to save money instinctively.
Money and finances can be difficult to manage, especially if you have never managed a business account before. However, many of the techniques you use to stay within budget at home will work just as well at the office. It’s all about being in the know.
My personal list of business expenses
- Convertkit $49
- Teachable $99
- Buffer $10
- Tailwind $15
- VSCO X membership $19.99
- Planoly $19
- Deadline Funnel $67
- Gleam $39
- MailChimp $10
- Lynx $5
- Hosting (annually, but one of my domains + hosting needed renewal)
- Fiverr help $10
- Dreamhost $29
- PayPal fees
- Shopify $29
- Google Apps
- Pretty Link