January is Financial Wellness Month. Have you thought about the financial wellness of your business? I have counseled businesses for more than 30 years, and advise that financial wellness begins with a handle on your business’ accounting so you know where you stand.
Not sure where to start? Here are some helpful tips to help you stay on top of your business finances:
- Keep personal and business finances separate – maintain a bank account specifically for your business. Don’t be tempted to use your business account for personal expenses. And be sure to reconcile your bank account every month. This will help you detect any fraud, as well as keep close track of the funds you have to use for your business.
- Keep records of all deposits and track every expense – distinguish between the different types of deposits such as income, owner investments and loan proceeds. Categorize your expenses to take advantage of tax deductions.
- Retain all source documents – this include invoices, receipts and deposit slips. An electronic system may be a good idea to help you keep organized.
- Analyze your financial statements – gain an understanding of your businesses financial situation. This will help you identify trends, as well as help you plan for the future of your business.
- Maintain accurate info on employees – keep your payroll info up-to-date and have all the information necessary to prepare W-2s.
- Contact your local SBDC to schedule a free and confidential appointment to discuss your finances, cash flow, financial projections, and plan for the future of your business at iowasbdc.org.
About The SBDC and the Author
The Iowa SBDC provides no-cost technical services and advice for Iowa small businesses and individuals looking to start and grow a business. The 15 centers throughout Iowa are run by small business experts and counselors who have the experience and expertise to confidently help on a number of topics.
Paul Heath, Regional Director for the University of Iowa SBDC has been in the position since 1984. His expertise is in financial analysis for small businesses. He holds an MBA from the University of Iowa, as well as a Certified Management Account (CMA®) designation. He is also a Certified Business Advisor (CBA®).