When starting a business for the first time, one of the biggest concerns that you might have is managing your financial situation. Finances are important when it comes to a business because it helps you understand how much money you’re making or losing. It also helps to determine your profits and where you’re making the most money. You can then take this information and focus on specific parts of your business to grow your brand and ultimately improve your business.
But managing your finances isn’t easy, especially if you’re a relatively small company and don’t have much experience managing money. So what options do you have?
Managing it yourself with multi-purpose software
In the beginning, it’s completely possible to manage your business finances using multi-purpose software. By this, we mean any software that isn’t originally intended to be used for finances. For example, spreadsheet software like Google Sheets or Excel is perfect for managing light finances. It comes with a lot of functions that can help perform calculations and you can use the software for other purposes too, making it a valuable investment.
However, you’ll want to eventually upgrade to something like fiscalcs.com or a cloud accounting option. This is because your spreadsheets and documents will eventually grow too large, resulting in inefficiencies or productivity issues. Dedicated accounting software is generally the best way for a small business to handle their finances once they’ve grown a little. It’s also helpful if you have lots of different products to sell since it can manage lots of different products and services.
Hiring a freelance or part-time accountant
The good thing about a small business is that you rarely perform enough transactions that you need a dedicated accountant from the beginning. In most cases, you could actually do fine with a freelance or part-time accountant that only works a few hours a day.
Choosing the right accountant can be a little tricky. It depends on your budget and the needs of your business. Some small businesses might only need an accountant for a few hours a week, but others might need an accountant at least once a day to help manage all of their transactions. It’ll depend on the volume that you trade at. It’s important that you focus on communicating with your accountant so that you can ask questions when needed, or ensure that they’re doing their job correctly. This usually isn’t a concern with professionals.
Small businesses often find it difficult to manage finances because they’re worried about getting numbers wrong or forgetting some calculations. Be it filing your tax return or budgeting for expenses, a lot of this can be made easy with the right software. Alternatively, you could always hire an expert to assist you. This can be more costly, but it’ll make things a lot easier and you’ll have a dedicated specialist who is willing to answer your questions. Whatever option you pick, it’s important that you don’t ignore your business finances.