Of all the aspects of business ownership, finances cause the most anxiety for many. They can be challenging to manage, and if something goes wrong, the penalties can be daunting. Fortunately, much of the confusion around finances can be eradicated by following a handful of simple steps. Next time your business's finances are giving you headaches, try these.
1. Don't panic, organize. It's easy to feel overwhelmed when your financial recordkeeping has gotten away from you. Receipts, bills, statements, all end up in a pile and it's hard to figure out where you stand. The first step is to restore order. Because financial transactions are tracked chronologically by your bank, that's the simplest order for you to use. Go through every record of money coming in and going out, and put them in order by date. Enter them into your paper or electronic ledger, then store them for safekeeping. Once the paper trail has been filed, compare your paper records to your statements. If there are any discrepancies, you now know what they are and how big they are. Work with your bank to obtain copies of any missing pieces--and hold them to a high standard of customer service!
2. Make a plan. Once you know how much money came in and how you spent it, you can start working on a budget and a long-term plan. Use online templates and tools for this, or go the old-fashioned route with paper. What matters is that you have a clear idea of what your business needs. Put a reminder on your calendar to review your budget and your long-term financial plan every quarter, in case it needs tweaking.
3. Get help if you need it. Recognizing the limits of your expertise is not failure, it's sound business judgement. Look for a financial management adviser until you find one who understands your needs, treats you with respect and is eager to empower you, not just to take your money. Connect with us; ReconciledIt can help you get a handle on your current position and then support you in getting it to the next level.
Nothing boosts confidence like competence. Once you get a handle on the art of financial management, you will be able to set and achieve business goals like never before.