The words "love" and "responsibilities" are rarely heard in the same sentence. And, that's especially true when it comes to financial responsibilities and your business. Typically, those financial responsibilities mean time-consuming tasks and complex decisions. They also involve an outlay of money that you had not planned for.
What are Business Financial Responsibilities?
While there are specific types of business financial responsibilities, such as paying your bills and payroll, there is another more general meaning. And, it's this meaning that, when taken to heart, will help you love your business financial responsibilities instead of dread them. What is it, you may be asking? Operating within your means.
Although it's a bit different than personal financial responsibilities, operating within your means involves being smart with money and not piling up debt. Therefore, you can, in certain situations, spend more than you make. However, it must have a sound reason, like expanding the business or anything else that would eventually result in greater income potential. In order to love this financial strategy for your business, you need to do certain things to make it happen.
Keep it Simple
The easiest way to disliking business financial responsibilities is to complicate them. And, it's easy to do given today's environment where there are multiple types of business bank accounts, credit cards, lines of credit and more. Once you get one business credit card, you are seemingly flooded with offers that include all types of rewards cards that promise points and perks for joining. You may also have multiple bank accounts because some financial institutions provide for international transactions, while others don't. Or, you continue to add different vendors who you have to each pay with a different payment system.
What this does is suck up your time and money. It takes longer to pay or address each financial obligation using a different system. There is considerably more transactions to record and remember. Plus, you may find that you are paying significantly more fees and annual memberships to enjoy these different reward cards. Also, if you are carrying any balances across multiple credit cards or lines of credit, the amount of interest is increasing rapidly.
Instead, take the time to explore different companies that can provide you with more options within one business financial platform, including accounts and credit. Then, identify a payment processor that can handle domestic and international transactions. Finally, find an accounting system that integrates with those other financial tools so you can maintain a single view of all your business financial responsibilities. The result will be less work and far fewer expenses.
Invest in Financial Literacy
Often, when we don't know much about something, we feel powerless. The lack of control means we may try to avoid those responsibilities at all costs. However, you can't afford to be illiterate when it comes to your business financial responsibilities.
Take the time to increase your financial literacy. That means understanding various accounting terms and why they are important. It also involves learning how to make a budget, use financial forecasting tools, and discover what types of financial strategies work for your business type. Understand how to read financial statements and reports. All of this doesn't mean you have to go back to school. Instead, there are numerous online financial literacy courses many of which are even free.
Additionally, with so much content within reach of any device, read as much as you can on various financial content sites. This includes financial industry publications, forums, and social media groups. Financial experts are available to answer questions to help increase your knowledge about business finances. Once you know more about financial processes, you'll learn to love them.
Track and Record Everything
Although it sounds tedious, technology comes to the rescue with tools that make it easy to record every receipt you get so you can more effectively track what you spend. By doing so, you have this quantified information available to easily view within financial software plus help maximize your business tax deductions. Numerous free or low-cost receipt and expense apps can be downloaded for your iOS or Android device to make this as easy as possible.
Also, you won't wonder and be frustrated as to where all the funds went should you see less in the business bank account. It will be a wake-up call to have everything tracked and recorded, keeping you on top of your business financial responsibilities.
Work by the Budget
When you have a map, you are likely to find it much less stressful getting to your destination. You know where you are going and even have some alternate routes should anything go wrong. Without that map, it's easy to get lost and off track. Then, the frustration starts and the journey becomes a hassle.
This is also how you should look at your business financial responsibilities. A budget is that map. It tells you what you can spend and where. If you are not sure, you can review this formal document and immediately see where you have gone off track on your spending. This helps you get right back to where you should be with your business financial responsibilities. You are much more accountable and won't find yourself not saving enough to cover larger purchases or having the funds to contribute to a retirement account.
Technology makes it easy to construct a budget and stick to it. Many budgeting apps already have templates and tell you what types of business expenses to consider in your budget. Some accounting software platforms already come equipped with budgeting and forecasting tools.
Re-assess and Reduce Regularly
Every year in business will be different. That's because of external and internal forces that reshape your opportunities and challenges. That means your business financial responsibilities will change along with this environment. To help you love this constant state of change, you'll need to re-assess where you stand each year with your financial strategy, current and future goals, and investments. This assessment provides you with the opportunity to make the necessary changes to help your business grow. Also, it's the time to see where else you can cut back on expenses to maximize profitability.
For a business owner, it may not be easy to see what needs to change. However, if you bring in a financial advisor or a mentor, they can identify those areas that might have been in your blind spot. They are not there to criticize your business decisions. Rather, these financial experts are worth their weight in gold because their sole focus is to improve your financial status and show you how to love your business financial responsibilities.