Be sure to always keep an accurate record of your transactions. Whether it’s for an annual tax payment or audit or just for the assessment of your balance sheet, it is extremely important to keep a record of your debits and credits for future reference.
File your business accounts and personal records separately. This will protect your business and prevent confusion in case of a tax audit and make management of these accounts much easier.
Entrepreneurs often offer all their assets as collateral, putting themselves at risk of losing it all. Protect your personal assets by forming a legal business entity, thus ensuring liability protection so that creditors cannot lay claim to personal assets like a car or house to settle debts.
Monitor the financial progress of your business on a weekly basis. Know exactly how much money you have in the bank, how sales are progressing and how much stock you have left. Review your financial position against the set targets in your business plan regularly.
To determine how much money you have to reach your goals, you have to plan your finances very thoroughly. Make sure you have a reliable accountant, whether personal or online.
Charge what you feel your products or services are worth; don’t settle for cheap to get more work.
If you don’t have much capital, find a reliable bank which will provide you with the right financial help without charging high interest rates, and open a cheque account for business purposes.
Avoid the hefty fines and extra costs of late tax return submissions and other payments by planning in advance. Find a reputable tax adviser to assist you with good advice.
Save as much money as you can every month, whether in a bank or otherwise. Try investing in assets that will provide a return, e.g. property.
If anyone owes you money, make work of collecting it as soon as possible, else your money is working for someone else. Send them reminders and demand letters, but if that does not have the desired outcome, use professionals to assist you.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)