Owning a small business can come with a steep learning curve, and it’s one that many entrepreneurs face alone. Learning as you go is never easy, and there are many aspects of day-to-day business that need to be mastered. In particular, small business owners may struggle to keep finances in order.
While it can be challenging to keep your business’ finances organized and under control, with a little know-how—and a bit of expert advice—you can get a grasp on the information, procedures and technology you need. Below, 10 members of Forbes Finance Council share their top recommendations for small business owners who are struggling to keep their finances in order.
1. Use Dedicated Bank And Credit Card Accounts
Entrepreneurs’ time has an incredibly high value. If outsourcing accounting is not feasible early on, the best practice is to use dedicated bank and credit card accounts for all your business activity. This setup will simplify migrating to an outsourced solution down the road. The best entrepreneurs focus their time on what they do best (hint: it is usually not their finances). – Levi Morehouse, Ceterus
2. Ask Your Community For Help
You may feel insecure about your finances and be tempted to tackle them solo, but tapping into your community will only make your business stronger. Lean on business owners in your industry or neighborhood. These are great resources to learn about best practices for managing finances, building business credit and more. Chances are they’ll be able to share downfalls and wins and provide guidance. – Steve Allocca, LendingClub
3. Innovate And Automate
In the early days of my business, I used to handle the books on my own. However, as the business grew I had to delegate and automate most of our day-to-day tasks. I think to the extent you can automate everything through software you should. Tools like QuickBooks really streamline accounting and show you where you’re spending. By seeing this data, you can easily determine where and what is needed. – Jared Weitz, United Capital Source Inc.
4. Get Excited And Organized
Get excited and organized! Three tips are: 1) Invest in decent software and pay for an accountant to set it up correctly and provide you with some basic user training. 2) Establish separate bank accounts for personal and business matters. 3) Take pride in your archive system and create a filing system with labels so that you can find documents and have them at your fingertips. Then maintain! – Geanette Rodriguez-Ojeda, ARRI Rental
5. Separate Your Business And Personal Expenses
When you start a new business, be sure to separate your personal and business financials. Have a business account and a personal account. This will make it easier down the line to hand over your financials to an expert. One other thing that will be immensely helpful is tracking how your money moves. Luckily, many banks can quickly produce charts showing you exactly how your money was spent. – David Ehrenberg, Early Growth Financial Services
6. Utilize What’s Free
A startup may be too small to want to invest in an accounting package like QuickBooks. So in the interim, many commercial banks are providing free planning packages to help individuals and small businesses manage cash flow. Some banks even have people you can talk with to help set all of this up. This is a good way to start to establish solid managerial habits now before your company gets too big. – Chris Tierney, Moore Colson CPAs and Advisors
7. Make A Game Of Forecasting
First, find software that helps you easily keep track of everything. Then, make the budgeting and forecasting process a game with yourself to see how close you can get to your projections. Start out doing it month by month. Then increase to every quarter. Then forecast the entire year. This is a great way to create the good habit of staying on top of your business finances. – Ben Gold, QuickBridge Funding
8. Outsource Non-Core Activities
Successful entrepreneurs do one thing well—they identify an unmet need in the marketplace and fill it. Everything else is a distraction. If it’s not core to your business, outsource it. Smart entrepreneurs stick to their own unique abilities and hire others to handle all the other stuff. Organizing finances is truly a non-core activity. – Erik Christman, Oxford Financial Partners
9. Build A World-Class Finance Team
Hire a part-time CFO who will provide you with a high-level finance leader at a fraction of the price of a full-time CFO, which most small businesses can’t afford. A part-time CFO is worth his or her weight in gold. They can direct you on key decisions and how to improve efficiencies and create growth while being able to afford the cash outflows—so you don’t have to worry about the numbers. – Khurram Chohan, Together CFO
10. Find A Low-Cost Entry Point
There are multiple services that handle and simplify financial and accounting needs. People forget about accounting, taxes and strategic financial management. Finding a low-cost entry point for all those factors is important. But for a few hundred dollars a month, you can get a dedicated team managing your accounting and finances for you through services like Acuity.co. The cost pays for itself. – Sal Rehmetullah, Fattmerchant