4 Important Finance Tips for Small Businesses

Running a small business requires more than the knowledge of the products or services you provide to your customers. When you are in charge of operating a small business in any industry, it is vital to keep track of your expenses and overall finances to ensure the business stays afloat and turning a profit for as long as possible. If you are the owner of a business and you want to grow it while keeping profits generated, following a few important tips regarding finances can ensure you are capable of maintaining your business for years to come.

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Working With Professionals on Taxes

Hiring a CPA (certified public accountant) to help with organizing any taxes you owe and are required to pay for your small business is recommended if you have no prior experience with handling your own finances or business taxes. A CPA is also capable of helping to get you as many deductions and tax write-offs as possible based on the type of business you are running, your employees, income and any expenses you may have accumulated throughout the fiscal year. A CPA is able to also submit all of the tax coupons for each quarter that are owed to the federal and state governments for your business income, keeping your taxes and finances up to date while avoiding potential late fees and penalties.

 

Reviewing Your Estimated Tax Payments

To help avoid underestimating the amount of money you will owe in taxes for each quarter, review the past year of recently-filed taxes for your small business to get an estimated amount you should pay each quarter presently. By reviewing your previously-paid tax amounts, you are more likely to submit accurate payment coupons when you are paying your small business taxes ahead of time each quarter in the current year.

 

Using Software and Tools to Help With Managing Finances

There are online tools in addition to traditional financial software available to help with keeping track of invoices, expenses and generated income for small businesses. Finding the right tools for your small business can drastically help to organize your finances while ensuring you have a clear grasp on the business model you currently have in place. Some software also allows you to track payroll and the employees you have working with you ensure you have all of your business information in one location, making it easy to access from your own computer and in some cases, any computer with internet access.

 

Keeping Personal and Business Accounts Separate

In order to ensure you are tracking your finances as closely and accurately as possible, keep your personal income and expenses separate from any business expenses, income and deductions. Opening a business credit card is recommended to easily track business expenses when tax time arrives, making it easy to determine what constitutes as a deduction and what does not.

Having a personal checking account allows you to also set up an instant withdrawal for each check or deposit you receive up to 25% to help with covering any taxes you may have for your personal income and self-employment each quarter or annually when you file your taxes.

Additionally, filing personal taxes for your own income and personal salary is much easier when you have a separate personal account from your business account.

Understanding how to manage the finances of your small business is recommended whether you are just launching the business or if you are already an established corporation. The more organized your finances are year-round, the simpler filing your taxes will be and the less likely you are to find yourself audited each year.

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Dusty Cannon is a financial manager and guest author at BestFinanceSchools.net, where he contributed to the guide to the Top 10 Best Online Master’s in Finance Degree Program.

 

Check Our These Additional Tips For Small Business Owners


Tips for small business owner success by CBS News

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