Easy Steps To Get Your New Company's Finances On Track
Operating a business is a major task, but the hard work doesn't just start when the business becomes successful; it starts from the moment you start the company. If you're planning to start a business, you understand this first hand. One of the areas in which you have to do the most work is your finances, particularly, separating your business finances from your personal finances. To assist you with this process, here are a handful of tips.
Get a Separate Bank Account
One of the first things you need to do is get a separate bank account. The worst thing a new business owner can do is to mesh their personal finances with their business finances. If you don't have a separate account for your business, this line will easily be blurred, and you'll find yourself in a world of trouble.
With a separate business banking account, it's easier to safeguard your personal finances and have a clearer view of what money you have coming into the business and out. Just about every banking institution offers business accounts, so it shouldn't be hard to secure one.
You should also put yourself on the payroll. When you work a typical job, you get paid the same amount, no matter how successful of a week your business had. You should adopt the same mindset for your business.
Since you're starting out, you could set a salary amount for the next six months, and then revisit this value every six months to see if it needs to be adjusted up or down. This step is critical to keeping more money in your business than in your wallet, which is a vital key to success.
It's always the goal to keep all your personal and business finances separate; however, there are times when the inevitable happens. For example, a piece of equipment breaks down, or you need to cover the cost of this week's inventory.
Whenever you have to dip into your personal savings or credit cards to cover business costs, make certain you payback these expenses like a loan. So, if you covered $1,500, only pay yourself back the $1,500. If you don't practice this step, you might end up getting more out of the business account than you actually put into it.
When you keep your personal finances separate from your business finances, it will be much easier to manage your accounts on both fronts. Make sure you're working towards this goal to protect yourself.