Our columnist Scott Singleton outlines top tips to make your money matter.

After providing several years of counselling to small business owners and start-ups I’ve learned the complications that accounting causes for most small business owners. Shrouded in mysterious acronyms and plays on words accounting appears to stifle even the most passionate entrepreneur.

Over the years I have provided my clients with five simple rules to keep the enigmatic number game down to simple math.

  1. Separate business from pleasure. 

You are in a shopping mall after meeting one of your clients when you spot that perfect gift for your kids’ birthday, sure it’s not a business expense but your company card is handy. You have every intention of paying the company back. One quick transaction turns into five and soon you are spending two hours a month deciphering your spending habits in order to reconcile your accounts.

Things get complicated fast, and you don’t need that headache. By keeping separate bank accounts for business and personal, you’ll save yourself hours and make it easy to keep track of deductible expenses in one place. You will also give yourself a more accurate picture of how the business is doing which may be priceless information when it comes to those key business decisions.

  1. Plan time to spend on your accountants 

Set aside time every week to do your accounting.  You’ll have more insights into your transactions if you are recording them close to the time that they have occurred. Something always feels more pressing than your finances. But when you find the time every week, you’ll feel more positive about your business and less stressed about your accounts.

  1. Draw information from those close to your business

When you’re looking for insights into your businesses spending, track what is likely one of your biggest expenses, labour. Keep track of all your labour related costs such as employee’s tax, perks and bonuses.

This will empower you to control your labour costs before they control you.

  1. Have a pro in your corner

The days of small business isolation has long passed thanks to the abundant information the internet can provide in sourcing a professional accountant.  Their intimate knowledge of the profession as well as tax laws will save you money almost every time. I know how tempting it can be to save a buck and do it yourself, but it’s almost never more cost-efficient in the end. An accountant will almost always find more deductions and keep you penalty-free. On that note, the cleaner your records, the fewer billable hours you’ll have to pay, so make sure you’re organised. But when things get technical or taxes are due, save yourself the money, time and headaches and call in a trusted professional.

  1. Don’t forget to get paid. 

This may seem straight forward, but you would be shocked at how many small business owners don’t properly track invoices and customer payments. If you’re not keeping proper records that you can make sense of , it could be months before you realise you have outstanding invoices. Make sure you’re properly tracking all payments due and recording when each invoice is paid, how long customers generally take to pay, and which customers you’ve had difficulties collecting payments from in the past. This will provide you with useful information when managing your cash flow.

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