Use these money management tips to potentially help build a stronger financial future for your business
Multitasking, juggling multiple priorities, poor cash flow, and a general lack of time/energy are the primary reasons that small businesses don't thrive. Here are a few business strategies to help your business run smoother.
Separate personal from business
It's tempting to use existing personal credit cards, along with bank and savings accounts, for business purposes, particularly when you're getting started. But a separate setup for business income and expenses helps delineate the two, simplifies tax preparation, and may reduce personal liability.
Consider multiple accounts for your business
One tip for accommodating different business needs — taxes, operating expenses, and an emergency fund — is to find a financial institution that allows you to have linked yet separate accounts or funds. Once you do that, automatically divvy up every invoice payment as needed into various accounts.
Figure out a digital record-keeping system you like
What works for you may not work for someone else, so review the options in software programs to find out what fits your accounting style. Some have a small monthly fee but allow you to generate branded invoices and offer payment collection and tracking, account reconciliation, and custom reports for tax purposes.
Create an expense tracking routine
Recording your business expenses can help reduce your tax burden, but it's also imperative to maintain accurate records. Save receipts and statements, and consider a quick-scan program to keep digital copies. Use your digital record-keeping system to collect data and find a tool that helps you track business-related mileage.
E-pay and e-invoice, if you can
Switching to these options can help you get in the habit of immediate billing and allow people to send you money efficiently. In addition, many online processors integrate with most bookkeeping or invoicing systems to allow for seamless record-keeping collection.
Consider using a tax professional
When you work for yourself, taxes can be confusing and tricky. They involve not only Social Security and Medicare but also 1099s, itemizing, and quarterly payments. Investing in the services of an expert may pay off by saving you time and reducing the possibility of mistakes and fines.
Review your insurance needs
There are many questions you should ask regarding your business and personal insurance coverages. What would you do if you were sued? What if you couldn't work for a month? What will happen to your business when you die? Contact a State Farm® agent to review coverages such as workers' compensation coverage, commercial umbrella insurance, disability insurance, life insurance, business and professional liability insurance, health insurance, and more.
Save for retirement
There are retirement plan options every business owner should consider. Many self-employed people do not have a plan. Take time to review which retirement savings plan option would be best for you.
Plan for the unexpected
What will happen to your business after you are gone or if you become disabled? Business continuation is an important topic to consider for most small business owners. A will or trust does not always address the central problems created when this happens. This is particularly important when there are stockholders or other people who have an interest in your business.
Learn more about State Farm resources available for your small business. If you're ready to get a small business insurance quote, fill out this form, and a State Farm agent will reach out to you.
This post was created by State Farm with Insider Studios.
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The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
Neither State Farm nor its agents provide tax or legal advice.
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