Are you $pending

One of the things you can do to have control in the finances of your business is to take a good look at your habits when it comes to your expenses.   When you make a purchase are you spending or investing?   Ask yourself the following questions:

  • How will this benefit me or my business?
  • Are the benefits long-lasting?
  • If I wait a day, a week, or a month will I still feel the same way about the purchase?

Asking yourself these questions can keep you from making impulse purchases that are really just spending your hard-earned dollars and not really investing or benefiting you in the long run.

For instance, I recently had to purchase a new computer system.   As a part of this I really wanted double monitors.   I decided that for me, they are an investment.   Having more than one monitor increases my productivity.   I knew this was something I needed.

My next purchasing decision was the choice of envelopes for mailing out tax documents to clients.   Part of me wanted to go all out and purchase envelopes that are specialized, printed, and embossed.  After some consideration I decided against this.  While they may have given my “brand” a high-quality look, I felt that envelopes were not the best place to spend the extra money, especially considering that they may ultimately end up in the trash bin.

Your business is yours and perhaps your answers would have been different, but if you start to consider where your money is going, and how it impacts you in the long run, you can be more successful.

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Recordkeeping – 4 Little Things That Have a Big Impact For Businesses

What Do You Need to Know About

 

  1. Have a separate business bank account – There are many reasons to do this including ease of record keeping and if you have a separate business entity the IRS and many state laws require it.
  2. Keep good financial records – Your chances for success increase if you have a clear understanding of your financial health. Track you income and expenses in a ledger, programs like Excel or accounting software.
  3. Keep those receipts – Per the IRS, in order to deduct an expense you may need to be able to prove it.   You can do this the old-fashioned shoe box way, or you can store them electronically in a graphic format.
  4. Track your business mileage – This is often overlooked or estimated at the end of the year.   Once again, per the IRS, you need to prove it in order to deduct it.   Keep records of the date, amount of miles and the reason for your business joy-ride. Those business miles can mean more money in your pocket.