Showing posts with label Business Finances. Show all posts
Showing posts with label Business Finances. Show all posts

Thursday, November 26, 2020

How to Make Running Your Business's Finances Smooth and Simple




Business owners must strive not to complicate their money. It is easy to mismanage money in your own bank account, but the results are disastrous if you're running a company. The following are tips to simplify the running of your business's finances.

Focus on Problem Areas


Every company has one or more problems that are ruining their finances. For one company, the main issue is collecting on unpaid invoices, but for another, it's the purchase of expensive equipment that is not earning returns of investment. Pinpoint the exact causes of your financial problems in order to increase your chances of finding the right solution.

Use Cloud Accounting Software


When you download software onto a computer, you must use that particular computer to access your financial records. It's even worse if the records are kept in an accounting book. You must carry that book around and risk the confidentiality of your business if it's stolen.




The solution to this problem is cloud accounting software that allows you to manage your information online. Work conveniently in any location in the world without having to use the same book or computer.

Hire a Financial Expert


Have at least one person on your staff who is an expert on business finances. This could be an experienced bookkeeper, accountant, or manager who has handled taxes, accounting, loans, or investments. This is the professional that you and the rest of your staff will go to if they have financial questions.

Monitor Your Records Daily


Make a daily habit of monitoring the finances. At the end of each day, review the accounting records to check for discrepancies that could be honest mistakes or the early signs of fraud. You prevent a financial disaster by fixing small mistakes that are usually easy to spot.

Resolve Your Debts


Reduce the debts that are dragging your company down. There are debt consolidation or settlement options that allow you to combine numerous debts into one reduced, affordable monthly payment. Review all of the refinancing and payment plan options available to debtors.

Every business needs a smooth plan to prevent financial problems and grow the company over time. Find simpler ways to pay your business's taxes, manage expenses, pay creditors, and other tasks. Avoid borrowing more loans until previous debts are paid off. Monitor your financial information on a regular basis. Apply your common knowledge to improve the running of your finances.




Thursday, September 3, 2020

4 Tips to Help Beginner Real Estate Investors Understand Their Business Finances



Investing in real estate can be incredibly lucrative, but it is important to realize that there are potential pitfalls around every corner. That is why new real estate investors must come up with a solid financial plan that minimizes their risks while maximizing their profits.

Set Up an LLC


Well before you invest in your first piece of property, you should set up an LLC. That type of business filing is going to limit your risks if any serious financial issues occur with your investments. 


While filing as a sole proprietorship might work as well, your personal assets could be at risk if you must file for bankruptcy or any lawsuits are directed at your company. Luckily, filing an LLC is a relatively quick process that should only take a few days to complete.

Acquire the Proper Insurance


Even though an LLC will help you protect your personal assets, you might still face some major legal or financial issues as a real estate investor. A comprehensive insurance policy is going to be your first line of defense against a wide variety of covered risks. 


That could include situations such as a tenant filing a claim against you or an individual getting injured on one of your properties.

Work With a Tax Attorney


Your taxes are quickly going to eat into your profits if you aren’t careful, and that is why many experts suggest hiring a real estate tax attorney. One of those legal professionals will be able to help you reduce your taxes so that you get to keep more of your profits. 




As your business continues to expand, they can also ensure that you don’t run into any major issues with the IRS. Hiring a tax attorney might seem like a major investment, but their help is going to be invaluable in the coming years.

Consider Working With a Property Manager


If you are only managing a few properties, then you might be able to handle all of the daily tasks and projects on your own. That being said, you might want to work with a property manager or a property management company once you have more than three or four properties to deal with. 


That type of assistance is going to be invaluable, and an experienced property manager will allow you to focus on expanding your business instead of dealing with time-consuming daily tasks.

In addition to these few tips and tricks, you must also make sure that you have a plan for pulling out of your investments if they don’t work out. An exit strategy will allow you to get back on your feet if you run into any unexpected financial or legal problems in the coming years.




Monday, April 27, 2020

How to Financially Protect Yourself When Going Out of Business



Going out of business is often the reason that keeps entrepreneurs from starting a business. The fear of failure presents too great a risk, and thus, individuals play the safe card. For the brave and courageous, who have stepped up to the plate and accepted the challenge, there are a few safeguards you can put into place, before the doors close to your business. These measures can protect you financially—even if your business goes under.

Consult Legal Services


Before starting your business explore all options. It’s not a bad idea to speak with an attorney to find out about the risks of each type of business. Will it be a sole proprietorship, a partnership, LLC, or a C or S corporation? Each type of business offers benefits but also has its drawbacks 


 Each is taxed differently and if your business shuts down, your liability is different as well. Play devil’s advocate and consider what would happen if things went South. This can set you up for success or failure, as well as protect you from financial ruin.

Know Your Market


Research the competition! Know the going rates and watch the success, as well as the demise of other businesses. Study their patterns and what has worked and not worked. Of course, this education should happen before you launch; however, it never ends. You should constantly be reading and observing the market around you. 




Know the trends and the forecasts. Watch for patterns throughout the year and how seasons, the economy around the world and local, as well as current events affect said patterns. Keep good records and data, so that you can forecast your own company’s trends.

Adapt


This is potentially the most important part of being a business owner. Yes, your unique product is what makes your business a success. It draws customers’ attention and keeps the doors open; however, there comes a time that things change. Technology quite literally evolves every day. If you do not keep up with the times and refuse to adapt, then, the business world might leave you in the dust. 


Know when it’s time to make those changes. Know when it’s time to upgrade software systems and move forward. Don’t be so married to a product that you hinder your own progress. If customers continue to tell you that they need something more efficient or that a process no longer works, listen and act. The worst thing you can do is ignore their opinion, since they give you a paycheck. 

If your business is not succeeding in the market, pause and reflect. Blockbuster is possibly the biggest example of a business that was killing it, but grossly missed the online market and sunk quite dramatically and absolutely. Kodak, Pets.com, Sears, and Abercrombie & Fitch are among some of the other businesses that refused to adapt and paid the price dearly.

Zero-Sum Budgeting


If your ship is sinking, there is a budgeting practice that can be used both on a personal level, as well as a business level. Zero-sum budgeting is the practice of assigning a job to every dollar. Essentially, you tell your money where to go. 


It requires some homework. ou need to study the spending of previous months and know where your dollars are going. It helps if you are on this path before you get to the point of shut-down; however, it can also be one last hurrah. Zero-sum budgeting encourages you to save one full month of expenses. 

After you’ve tallied everything and know what your expenses are, you save that amount of money, and then, that’s what you pay your bills with for the present month. Essentially, you are always one month ahead. This is a great way to eliminate unnecessary spending and crackdown on bad habits.

Credit Counseling


Before closing your doors, consider consulting a credit counseling business or financial institution. They can help you consolidate some of your debt, as well as find ideas to generate more income before you have to declare bankruptcy or go completely out of business.


Accept Reality


Know when it’s time to shut things down. One of the worst ways that you can inflict more pain and consequences on yourself is to deceive yourself. See the writing on the wall and give yourself a timeline. Know when enough is enough and it’s time to sever ties. Thomas Edison held over 1000 patents. He knew that not all of his ideas would succeed. It’s okay to fail. Sometimes that becomes your richest education and lesson.

Running your own business is challenging, but also rewarding and exciting. Be smart about financially protecting yourself, before you get to the point of going out of business. Start by protecting yourself from the beginning. Choose wisely on the type of business that best fits your business direction, as well as offers protection for the future. Do your homework, be pliable, trim the fat and stick to a solid budgeting system. Most importantly, consult with credit professionals, and ultimately, be real. Know when it’s time to get out. Some of the most successful businesses failed at one point or another. Learn from those lessons and move on. It’s possible to financially protect yourself all steps of the way.


Tuesday, July 19, 2016

5 Simple Ways to Keep Your Business Finances Separate From Your Personal Finances




All to often, entrepreneurs do not differentiate their company and individual income resources. After all, you are your company, nevertheless mixing up the 2 will eventually make a mess for you and your accounting professional at tax time.

Even if you're just beginning, it's necessary to break up these 2 parts of your monetary life. Treat your company, small or large, like a living entity. That begins with tracking your expenses in your company separately from your home funds. While at first it may seem like they are one in the same if you are a one-man entity.

Here are a few ideas to show you how to separate your company from your individual financial resources.



Open a business bank account


Begin with your banking institution. Open a business checking account. If there's ever a concern relating to whether it's a pastime or a business, the IRS wants to see if you have a separate bank account.

If you use Quicken or Quickbooks see to it you have 2 distinct accounts: one for home and one for the business. Having 2 bank accounts is tax-smart and it will likewise help you manage your company better.




At the end of the year, all your revenues and costs will remain in one place, making record keeping and tax filing a lot easier. If you attempt to split up all your documents in March or April, you will not have the capability to appropriately keep in control all the cash movements from the previous income tax year. Maintaining good records all year-long will help be you organized and you will have the ability to stay on top of any problems before they get to be big ones.


Apply for a business credit card


Credit is always needed in any small business. Try to get a credit card for your company as soon as possible. Like a different checking account, a charge card will help your record keeping and provide you with something to show the IRS if you're ever audited.

Your business credit card might offer you an additional tax reduction too. If you need to keep a balance on a business credit card, that's the only charge card interest that's tax deductible as an overhead expense.


Keep it legitimate


Think about establishing a limited liability company (LLC) or an S Corp for your business. Seek expert consultants (we suggest this group contain lawyers, Certified public accountants and insurance representatives) and identify which entity makes the best sense, how this company will affect your taxes, monetary practices and precisely what insurance you need.

These types of legal entities will offer you a better level of liability defense, which will be very helpful to your company if ever litigation is taken against it.


When it's income tax time


Keeping bookkeeping accounts, charge cards and record keeping software programs assigned entirely for your business will provide you exactly what you need to send for your income taxes and to show to the IRS that your company in fact is a business. However there are other factors to think about, too.




If you use an office to run your operations from, you've qualified for a deduction, but only if you do this right. Even then, you maybe in for an audit.


Compensate yourself


This is simple if you are a corporation, but is recommended even when you are a sole proprietorship. Allow yourself a salary. Don't go over that amount by paying for personal expenses. Exceeding it just lures you to skim company funds to pay your ongoing grocery or lease bills.



Be prepared


When income tax time rolls around, each of these 5 methods will make filling out forms simple and headache-free. Your company's accounts will be well-organized, enabling you to have a clear peek of how it is doing, where the weak spots are, and where it is prospering.

We truly hope these suggestions help you separate your company and individual financial resources. If you have any additional ideas or recommendations, please provide them in the comment area listed below or on social media networks.




Join 1000's of People Following 50 Plus Finance
Real Time Web Analytics