Is one of your New Year’s Resolutions to make your business more profitable? Here is a list of action items (in order of importance) that will help your realize your goal. If you have an action item mastered, work on the next one.
- Separate business and personal banking accounts.
We all know we are supposed to keep separate accounts but we still regularly see companies that don’t have this discipline. Make your life easier and exclusively use the business credit card for business expenses. Get in the habit of transferring money from your business to your personal account – NOT using your business accounts to pay for personal expenses.
- Find a financial system to keep track of your business that you are addicted to.
If you love excel and are a pro then use excel. If you are on the go and do everything on your phone, think QuickBooks Online. We can set up companies on QuickBooks Desktop but if they aren’t going into the software regularly they won’t have helpful financial information.
- Update your financial information weekly.
Pick a day and time each week when you will look at and update your financial information. If you plan to do the work weekly and miss a week you are not far behind. If you miss a month, catching up is more of a challenge. Plus, it is hard enough to remember what happened last week. Reconstructing a month old deposit that you failed to keep copies is painful. Save yourself. Get into a weekly rhythm.
- Prepare a budget to meet your goals.
Now that you have clean financial information, preparing a budget from historical information is easy.
- Compare your budget to your actual sales and expenses.
Compare monthly to see how your company is doing. You will find making simple adjustments on a monthly basis will improve your profitability. I use LivePlan to compare my forecast to my actual numbers. Find a system that is easy for you.
If you need any help implementing your bookkeeping New Year’s Resolutions, give us a call.