3 Accounting Tips For Solo Business Owners
As a small business owner, it’s difficult enough to complete the day to day tasks that keep your business running smoothly, much less keep up with the books so that you can run a profitable business. The following strategies will help you to stay on top of your finances and give you more time to spend on important things like pursuing your goals and exceeding your clients’ expectations.
Don’t Be Afraid to Ask for Payment
If you want to remain in business for the long term, it is not enough to have a unique, popular product or service that adds value to your clients. You also need a steady flow of cash coming into your business on a regular basis. The best way to ensure a steady cash flow for your company is to take steps to receive prompt payment for your work.
To make certain that you are paid on time, you need to have a system in place to invoice your clients automatically once your work for them is complete. You can help ensure that you will have the money that you need to pay your suppliers and other bills by offering a small discount to customers that pay their invoices early.
In addition to sending out invoices automatically, set up your system to send out a polite reminder to clients that have fallen behind on their payments. Don’t be afraid to personally telephone clients if their account is seriously past due.
For accounts that are seriously delinquent, you might consider offering a small discount if they will immediately bring their account current. In the future, ask clients that have a history of late payments to pay for part or all of their order up front on future orders.
Pay the Tax Man First
While no one enjoys paying taxes, you will want to make sure that you pay your tax bill on time if you wish to avoid late fees and other legal repercussions. To ensure that the money is there when you need it, don’t wait until the last minute to save the money to pay your super and other taxes.
Make sure you have the funds to pay your taxes by the due date by setting aside a percentage of your earnings on a regular basis. Put these savings into an account that is specifically for the payment of taxes and fees.
Use Slow Periods for Improvement
Regardless of what product or service that you sell, there will be periods of time when the work slows down in your business. While it’s tempting to fill downtime with busy work, you are better served by using this time to learn new skills and improve your processes.
Streamlining and improving your processes will help you to lower your overall costs, which can increase your profits and make your business more stable and sustainable in the long term. It can also help you to stand out from your competition when you use this time to help you improve the quality and turnaround time of what you offer to your customers.