Managing your Finances as a Small Business Owner

By: Steve Morgan, CPA, MBA

Sometimes financial tasks can be daunting to a small business owner. However, managing the financial aspects of a small business is crucial for its success. Below is a financial checklist that can help small businesses stay organized and compliant:

1. 1.  Register your business: Ensure you have correctly registered your business with the appropriate government authorities.
2.  Separate personal and business finances: Open a separate business bank account to separate your personal and business finances. Separating helps with accurate record-keeping, simplifying tax preparation, and maintaining the integrity of your legal structures.
3.  Track income and expenses: Maintain a system for tracking all income and expenses. This can be done manually or by using accounting software or cloud-based platforms. Keep all receipts and invoices organized.
4.  Develop a budget: Create a budget that outlines your expected income and expenses. Regularly review and compare your actual financial performance against the budget to identify areas of improvement.
5. Set aside funds for taxes: Set aside a portion of your income to cover your tax obligations. These include income tax, sales tax, payroll tax, and self-employment tax.
6.  Payroll and employee taxes: If you have employees, ensure that you comply with payroll tax requirements, such as withholding income taxes and paying employer taxes. Stay updated on any changes in employment laws and regulations.
7.  Understand deductible expenses: Familiarize yourself with deductible expenses allowed by tax laws. This can help reduce your taxable income and potentially lower your tax liability.
8. File tax returns on time: Meet all tax filing deadlines, including income tax returns, sales tax returns, and payroll tax returns. Failure to file or pay taxes on time can result in penalties and interest charges.
9.  Monitor cash flow: Regularly review your cash flow to ensure you have sufficient funds to cover expenses, pay taxes, and invest in business growth.
10.  Keep financial records: Maintain organized and accurate financial records, including bank statements, invoices, receipts, and financial statements. These records will be essential for tax purposes and can provide insights into your business’s financial health.
11.  Monitor and manage debt: If your business has outstanding debt, regularly monitor and manage it. Make timely debt payments to avoid penalties and negative impacts on your creditworthiness.
12.  Plan for future expenses: Anticipate and plan for upcoming expenses, such as equipment upgrades, office rent increases, or marketing campaigns. Budgeting for future expenses helps ensure that you are financially prepared.
13.  Review insurance coverages: Evaluate your business insurance needs and ensure you have appropriate coverage. This may include general liability insurance, property insurance, professional liability insurance, or worker’s compensation insurance.
14.  Seek professional advice: Consult with accountants, tax advisors, or business attorneys. Their expertise can help you navigate complex fiscal matters and ensure compliance with relevant regulations.

Suttle & Stalnaker PLLC is ready to help you. If you would like more information on how this applies to you, contact Steve Morgan, CPA, MBA in our Parkersburg Office at (304) 865-3558 or at smorgan@suttlecpas.com.