5 Ways That Small Business Owners Can Protect Their Finances

Protecting your finances is vital especially for small businesses. As a small business owner, you tend to have fewer resources at your disposal. This is why it’s crucial that you are able to manage and protect your finances. To help you out with this, we thought it would be useful to put together an article detailing how you can go about doing this. If this is something that you’re interested in learning more about, read on for five ways that small businesses owners can protect their finances.

Prepare Your Tax Documents

​​For most business owners, the end of the year signals the time to start preparing their taxes. They collect their tax-related records and receipts, then sort them out according to their personal filing system. By doing this, you minimise the risk of making any mistakes that may cost you money down the line. If you want to protect your finances even further, you can even opt to utilize professional accounting services to help you with your taxes.

Reconcile Your Accounts Receivable and Payable

Have you paid all the vendors who worked on your projects during the fiscal year? Are you still owed payment for the work you did this past year? Generally accepted accounting principles call for you to reconcile all the work you’ve completed or had completed during the year. While this may sound obvious, you’d be surprised how many businesses, especially small businesses, forget to do this.

Be Thorough With Payroll and Benefits

If you are a sole proprietor without employees, you can skip this step. But if you have employees, make sure you’ve paid everyone what they are owed, that any and all fringe benefits, such as a company car or transportation subsidies, are included in your calculations for how you’ve compensated them this year.

Audit Your Inventory and Assets

Some small businesses don’t use automated software to track their inventory or their fixed assets (about half of them do). As a result, what they have in the books isn’t always what they actually have. If they say they have more inventory on hand than they actually do, they will end up paying more than they should in taxes on it. The same goes for fixed assets on their balance sheets. If you insist on not using software, be sure to be extremely thorough when doing this.

Create a Plan 

Lastly, it’s never too early to create a plan for the future. By planning how you’ll be approaching your business, you give yourself the best chance of succeeding and protecting your finances. Now that you know how your business performed over the past year, you’ll have a good idea of what needs to be improved. Create an action plan for your business by analyzing the information at hand and using this information to make the best decisions possible.

Conclusion

We hope this article proves to be useful when it comes to helping you protect your finances. As you can see, there are a multitude of different things you can do to help you manage your businesses finances. Be sure to keep all of this information in mind so you can make the best possible decision for your business.

BarettStacey Accounting is a friendly, approachable team of accountants and bookkeepers in Bristol, offering quality financial services to help businesses stay on top of their finances. If you are looking for accounting and bookkeeping services, reach out to us today!