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Financial
Advice & Assistance |
10 Easy Ways To Organize Your
Business Finances
Written by: Michael G. Peterson
Whether you are a new entrepreneur or a more experienced business
owner, taking control of your finances can feel like a part-time
job. Some simple tips can help you streamline your time, organize
your finances and reduce the stress of business money matters.
1. Keep Your Bills in One Place
When the mail comes, make sure it goes in one place. Misplaced bills
can be the cause of unwanted late fees and can damage your credit
rating. Whether it's a drawer, a box, or a file, be consistent. Size
is also important. If you get a lot of mail, use an area that won't
get filled up too quickly.
2. Pay Your Bills on Schedule
Bill paying can be simplified if it's done at scheduled times during
the month. Depending on how many bills you receive, you can
establish set times each month when none of your bills will be late.
If you're paying bills as you receive them, chances are you're
spending too much time in front of the checkbook. Although bills may
state "Payable Upon Receipt", there's always a grace period. Call
the creditor to find out when they need to receive payment before
the bill is considered late.
3. Read Your Credit Card Statements
Most people take advantage of low interest credit card offers but
never read their statements when paying the bill. Credit cards are
notorious for using low interest as bait for new customers then
switching to higher rates after a few months. Make a habit of
looking at your statement carefully to see what interest rate you
are paying each month and if any transaction fees have been applied.
If the rate increases or a transaction fee appears on your
statement, a simple call to the credit card company can oftentimes
be beneficial in resolving the matter. If not, try to switch your
money to a more favorable rate.
4. Take Advantage of Automatic Payments
Most banks offer a way to automatically deduct money from your
account to pay creditors. In addition, the creditors usually offer a
lower interest rate when you sign up for this payment option because
they get their money faster and on-time. Consider it as one fewer
check to write, envelope to lick and stamp to buy. Just make sure
you record the deduction when the automatic payment is scheduled or
you run the risk of bouncing other checks.
5. Computerize Your Checkbook
Using a software program is a handy way to organize your finances.
Whether it's Quicken(r), Microsoft Money(r) or another package,
these easy-to-use programs make bill paying and bank reconciliation
a cinch. Computer checks can be ordered almost anywhere and fit
right into most printers. Once the checks are printed, all of the
information is automatically recorded in your electronic checkbook.
Furthermore, many banks have direct downloads into these software
packages so when money is deposited or withdrawn, the transaction is
entered immediately onto your computer. And, when it comes time to
do taxes, it couldn't be easier.
6. Get Overdraft Protection
Most banks have a service where, if you run the risk of bouncing a
check, the money will come from another source. For a nominal fee,
the bank will link your checking account to either a savings, money
market, or credit card so the embarrassment of bouncing a check will
be avoided. Call or visit your bank to learn about this convenient
feature.
7. Cancel Unused Accounts
Whether it's a credit card or bank account, write a letter
requesting that the account is formally closed. Not only will this
improve your credit score, it is a useful way to avoid money from
being scattered all over the place. Don't let department stores and
credit card companies lure you into opening new accounts by offering
favorable interest rates and purchase discounts. It's easy for
credit to get out of hand by taking advantage of every credit offer
that comes your way.
8. Consolidate Your Accounts
If you have several credit card accounts with outstanding balances,
try to consolidate them into one. Be careful and check the balance
transfer interest rates and one-time fees. Also, make a list of all
your open Money Markets, Savings, CDs, IRAs, Mutual Funds, and other
accounts to see if any consolidation can be done. Keeping your money
in fewer places eliminates all of the guesswork involved and reduces
errors.
9. Establish Automatic Savings
Create a link from your checking account into a savings account that
will not be touched. This can usually be done through the banks and
automatic amounts will be transferred over each month. Most people
will not put money into a savings account on a regular basis. They
may wait until a large tax refund check arrives or some other event
to actually deposit money into savings, retirement or other
accounts. If you establish an automatic savings deposit every month,
your accounts will begin accumulating money faster than you think.
10. Clean up Your Files
Make sure your paid bills are organized in a filing cabinet. Keep
individual files for paid bills. Go through your files at the end of
each year and throw out bills and receipts no longer needed for
auditing purposes. Contact your local IRS office to see how long
records need to be kept for audits. Usually federal tax return
audits can be done three years back but cancelled checks may need to
be kept for seven. Consult the Internet for auditing and
records-keeping procedures for your state or region.
About the author:
Michael G. Peterson is the Vice President of American Credit
Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling
organization that has assisted thousands of individuals and families
with their financial situations through seminars, education,
counseling services, and, debt management plans. For more
information, and free consumer resources visit
http://www.debtguru.com.
(c) 2005 DebtGuru.com(r).
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