1. Forecast major expenses
Whether you like it or not, your company will experience a roller-coaster journey of ups and downs. These are market seasonal impacts on your business, and you must be prepared to keep your firm afloat even during down times. Aside from that, your firm may ultimately want funding to modernize software or pursue a lucrative business opportunity. It is prudent of an entrepreneur to budget for such significant costs so that great chances are not missed due to a cash shortage.
2. Oversee company’s expenditure
When running a business, little expenditures that go unnoticed can quickly add up to a significant sum. The usage of a credit card by enterprises is particularly advised in order to avoid such a buildup. It may be used to monitor everything from stationery to business lunches, and it can be used specifically for business spending.
In essence, the credit card acts as a bookkeeping system, accounting for the cash spent, which is quite useful for submitting tax returns. Above all, it is extremely handy since it removes the need to handle significant sums of cash while using a credit card.
3. Make accurate records
True story: An entrepreneur misclassifies certain cash deposits as income and pays more tax than he should. One approach to prevent making mistakes like this is to make sure you have a system in place for accurately documenting your company’s financial activity. It may be a notepad or an Excel spreadsheet, but complete accounting software such as QuickBooks is preferred. The reason for this is because entrepreneurs are prone to become confused while making regular transfers into their business bank accounts. This money might be in the form of revenue, loans, or even a personal infusion of funds, and it should not be misinterpreted owing to incomplete paperwork.
4. Allocate money for taxes
Taxes are the last thing any business owner wants to deal with. Unpaid taxes may cause a slew of issues for business owners, but adopting a pattern of structured money allocation only for the purpose of paying taxes might help them breathe a sigh of relief. Otherwise, the IRAS may impose punitive actions such as fines and increased interest, which are obviously unnecessary. Aside from making sure there is enough money to pay taxes, entrepreneurs should be wary about missing tax deadlines. Making a note of tax filing deadlines on the calendar has been proven to rescue numerous businesses from fines.
5. Pay attention to invoices
It has previously been stated how critical it is to keep track of the company’s costs. In the same way, the company’s bills need to be paid attention to. Someone should ideally keep track of the billings so that no invoices go unpaid or are paid late. Many businesses, however, miss this because they believe that sending out an invoice equates to taking care of billing. It isn’t always the case, since businesses may need to submit updated, numerous invoices at times, and even follow up on bills. If payment deadlines are not reached, entrepreneurs should charge late fees based on whether the payment is 30, 60, or 90 days late.