How To Keep Finances Of Your Business Up & Healthy?

 

 

Fulfilling your dream of owning and running a business makes you fortunate enough. Starting a new successful small business can be very satisfying, but maintaining and making it expel with a bright future is completely a different game. According to surveys, the most business fail within the first five years just because the owners could not maintain their business. The most challenging part is operating a business finance and keeping it up & healthy with a continuous flow of cash.

 

Here are a few tips that you can follow to maintain good financial health of your business.  

 

Work With Bookkeeping Software.

It is very essential and helpful if you invest in reliable and robust bookkeeping software; or you can even hire an accountant or manager or a bookkeeper who can manage your finances well. Keeping track of your expenses and spending will help you analyze your business better. You should be able to create reports related to fiscal health of your business.

How To Track Your Expenses.

Only buying a best bookkeeping software doesn’t solve the problem of maintaining good health of your business finances. You would need to use it too, so as to track the business expenses. Regular tracking will lead to control and cutting down on your unnecessary expenses and help to improve your income. The business expenses are mainly, meals& entertainment, travel expense, supplies, vehicle expenses, and other expenses.

Information About Taxes.

Taxes hit every business differently, and it is biggest perk to own and run a business. Such as, if you run a business out of home then you can claim many home related expenses, like utilities and thus reduce your overall gross income. If you rent your business space, or lease a vehicle or warehouse then these are tax-deductible and save you lots of money. Don’t forget to discuss all the tax related benefits and advantages with your accountant.

How To Calculate Profit Margin.

Once you have a good record of your expenses, income, cost of goods sold, taxes paid, the left amount is the profit margin. To calculate profit margin, just deduct expenses from income. Now, you need to know how to make good sales and generate revenue. For healthier profit margin just adjust your fees or pricing.

Auditing And Evaluating.

This is the final stage where you can find out current status of your finances and business overall. You may need to ask the questions to know-

ü  Would you charge more or less?

ü  What number of sales per month can help you meet maximum margin and P&L?

ü  What number of clients or customers do you need to improve sales per month?

ü  How can you cut down your spending?