With Tax Day around the corner, now is the perfect time to organize your finances for the next year. Here’s what you can do to get your business’ finances in top shape.
Spring is coming, and it’s a great time to get your small business finances in order.
With tax season upon us, many business owners already have a head start on getting their books and records organized. Here is how to build on that momentum and get your business finances into fighting shape.
Take stock of your credit card usage and borrowing habits
It’s not a bad idea to spread your business purchases across several credit cards to avoid high credit utilization. However, if you’re using a hodgepodge of different cards, it could be making your bookkeeping more complicated than it needs to be. If that’s the case, consider whether it makes sense to pare down and limit yourself to using two or three cards.
Also look at your credit card statements to see what you’re paying in interest. If you were benefiting from any 0% interest card deals that have now expired, you’re probably paying more interest than you should be. Look for other cards that offer better deals so you can do a balance transfer. Similarly, if you have any high-interest business loans, look into refinancing them through a lower-cost loan.
See related: Use credit cards to boost cash flow at your business
Declutter the list of recurring purchases you make
Look through your credit card statements for the past year to see if there are any recurring charges you can eliminate. We’ve all signed up for software-as-a-service and apps we only used for a few months and then forgot to cancel. If there are any charges for products you no longer use, set aside a couple of hours this week to cancel them. This can save many businesses several hundred dollars a year – or more.
Reevaluate your accounting software
If your accounting software is too complicated to use most of the features, it may be time to check out the competition to find a program you will actually use. Migrating to a new platform takes some work, but it can be well worth it if leads to better record-keeping. Just make sure you plan ahead. You may need to enter your transactions in two different platforms simultaneously for a few months until the transition is complete.
Review how you accept payments
If you’re only accepting cash or checks, you’re probably leaving money on the table, since many customers prefer to pay by debit card, credit card or some other form of payment like PayPal, Venmo or Zelle. Ask your customers if there are payment acceptance options they wish you offered. Keeping them happy can give you a competitive edge.
Many customers who used to be comfortable paying in cash now prefer card-based payments for hygienic reasons, because of the coronavirus. If you’ve seen an uptick in card-based payments this year, review your swipe fees because they can add up. If you do have a merchant account to accept credit cards, take a look at the rates you’re paying. If you could get a better deal elsewhere, start shopping around.
Take a close look at your finance team
Are you happy with your bookkeeper and accountant? If you’re less than satisfied, then now is a good time to start asking around for referrals to other candidates. In an ideal world, both will become trusted advisors. Working with insightful pros is one of the best ways to take your finances to the next level.
Taking some time to organize your business’ finances this spring can help you save money. And with Tax Day right around the corner, you likely already have a head start on the clean up.