10 Easy
Ways To Organize Your Business Finances
Whether
you are a new entrepreneur or a more experienced business owner, taking
control of your finances can feel like a part-time job. Some simple tips
can help you streamline your time, organize your finances and reduce the
stress of business money matters.
1. Keep
Your Bills in One Place
When the
mail comes, make sure it goes in one place. Misplaced bills can be the
cause of unwanted late fees and can damage your credit rating. Whether
it's a drawer, a box, or a file, be consistent. Size is also important. If
you get a lot of mail, use an area that won't get filled up too quickly.
2. Pay
Your Bills on Schedule
Bill
paying can be simplified if it's done at scheduled times during the month.
Depending on how many bills you receive, you can establish set times each
month when none of your bills will be late. If you're paying bills as you
receive them, chances are you're spending too much time in front of the
checkbook. Although bills may state "Payable Upon Receipt", there's always
a grace period. Call the creditor to find out when they need to receive
payment before the bill is considered late.
3. Read
Your Credit Card Statements
Most
people take advantage of low interest credit card offers but never read
their statements when paying the bill. Credit cards are notorious for
using low interest as bait for new customers then switching to higher
rates after a few months. Make a habit of looking at your statement
carefully to see what interest rate you are paying each month and if any
transaction fees have been applied. If the rate increases or a transaction
fee appears on your statement, a simple call to the credit card company
can oftentimes be beneficial in resolving the matter. If not, try to
switch your money to a more favorable rate.
4. Take
Advantage of Automatic Payments
Most
banks offer a way to automatically deduct money from your account to pay
creditors. In addition, the creditors usually offer a lower interest rate
when you sign up for this payment option because they get their money
faster and on-time. Consider it as one fewer check to write, envelope to
lick and stamp to buy. Just make sure you record the deduction when the
automatic payment is scheduled or you run the risk of bouncing other
checks.
5.
Computerize Your Checkbook
Using a
software program is a handy way to organize your finances. Whether it's
Quicken(r), Microsoft Money(r) or another package, these easy-to-use
programs make bill paying and bank reconciliation a cinch. Computer checks
can be ordered almost anywhere and fit right into most printers. Once the
checks are printed, all of the information is automatically recorded in
your electronic checkbook. Furthermore, many banks have direct downloads
into these software packages so when money is deposited or withdrawn, the
transaction is entered immediately onto your computer. And, when it comes
time to do taxes, it couldn't be easier.
6. Get
Overdraft Protection
Most
banks have a service where, if you run the risk of bouncing a check, the
money will come from another source. For a nominal fee, the bank will link
your checking account to either a savings, money market, or credit card so
the embarrassment of bouncing a check will be avoided. Call or visit your
bank to learn about this convenient feature.
7.
Cancel Unused Accounts
Whether
it's a credit card or bank account, write a letter requesting that the
account is formally closed. Not only will this improve your credit score,
it is a useful way to avoid money from being scattered all over the place.
Don't let department stores and credit card companies lure you into
opening new accounts by offering favorable interest rates and purchase
discounts. It's easy for credit to get out of hand by taking advantage of
every credit offer that comes your way.
8.
Consolidate Your Accounts
If you
have several credit card accounts with outstanding balances, try to
consolidate them into one. Be careful and check the balance transfer
interest rates and one-time fees. Also, make a list of all your open Money
Markets, Savings, CDs, IRAs, Mutual Funds, and other accounts to see if
any consolidation can be done. Keeping your money in fewer places
eliminates all of the guesswork involved and reduces errors.
9.
Establish Automatic Savings
Create a
link from your checking account into a savings account that will not be
touched. This can usually be done through the banks and automatic amounts
will be transferred over each month. Most people will not put money into a
savings account on a regular basis. They may wait until a large tax refund
check arrives or some other event to actually deposit money into savings,
retirement or other accounts. If you establish an automatic savings
deposit every month, your accounts will begin accumulating money faster
than you think.
10.
Clean up Your Files
Make
sure your paid bills are organized in a filing cabinet. Keep individual
files for paid bills. Go through your files at the end of each year and
throw out bills and receipts no longer needed for auditing purposes.
Contact your local IRS office to see how long records need to be kept for
audits. Usually federal tax return audits can be done three years back but
cancelled checks may need to be kept for seven. Consult the Internet for
auditing and records-keeping procedures for your state or region.
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Michael G. Peterson is the Vice President of American Credit
Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling
organization that has assisted thousands of individuals and families
with their financial situations through seminars, education,
counseling services, and, debt management plans. For more information,
and free consumer resources visit
http://www.debtguru.com.
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