5 Financial Resolutions for Small BusinessApr 30, 2021
written by Bryce Warnes
It’s that time again: a new calendar year and the opportunity to start fresh with your goal-setting. Feeling extra ambitious this new year? Set some financial goals for your small business—we’ve picked our top five financial resolutions that you can put into action now for smooth sailing in 2021 (and beyond).
1. Set up designated business accounts
If you’re just starting your business, it might seem easier to use your personal credit card for start-up costs rather than set up new business accounts. However, it’s extremely important to separate your business expenses from your personal finances.
Why? For one, it makes keeping records easier—come tax time, you’ll know exactly what expenses are business-related and tax-deductible.
But more importantly, you’ll be covering yourself in the event of liability issues. Translation: if you’re a corporation and the line between personal and business expenses is blurry, you could be held personally liable for any business debts incurred.
2. Review your accounts receivable and payable
The beginning of the year is a great time to take stock of your accounts receivable and payable.
Go through any outstanding invoices and send friendly reminders to clients who owe you.
Similarly, go through your accounts payable and make sure you haven’t missed paying any vendors. Make it a goal in 2021 to avoid late fees by paying bills on time (bonus: this will help with monitoring cash flow, too).
3. Set one long-term business goal for 2021
Implementing small, quick changes is a great way to make new financial habits stick. But challenge yourself to think big and set one long-term goal for the year. Do you want to hit a certain sales target? Reduce overall company spending or fully revamp your company’s brand?
Set your goal and check in on your progress each month. Have lower sales than expected one quarter? See where you can ramp up efforts to counter this. Maybe you’re not charging enough for your product or services or you’re spending too much on advertising to be profitable.
4. Find a bookkeeping solution that works for you
Now that it’s a new year, evaluate your bookkeeping system and see if it’s working for you. Maybe you were doing your own bookkeeping last year but no longer have the time to continue doing so. Or, you can’t afford your local bookkeeper this year and are looking for cost-effective options.
The beginning of the year is easier to seamlessly transition to another bookkeeping provider—if you start fresh at the start of the fiscal year, you won’t have different sets of financials from multiple sources, which makes filing taxes easier.
Speaking of taxes: it’s also a great time to make sure your prior year bookkeeping is in order so you’re ready to file ahead of your deadline. It can be tough to sort through a year’s worth of receipts and expenses and try to cobble together a financial statement.
Feeling stuck? An online bookkeeping service like Bench can get your books caught up and provide year-end financials that you or your CPA can use to file your taxes. Bench will take over your monthly bookkeeping so you’re not caught in a lurch again. Use the From Gray to Green link to sign up!
5. File your taxes early
If there’s one financial resolution that you stick with, it’s this: don’t wait until the last minute to file taxes. On top of this added stress, you may miss deductions if you’re rushing to file. Plus, you don’t want to pay the IRS late fees or penalties if you can’t make the deadline.
Make a game plan now. If you already know that you’re going to be hard-pressed to get your books organized by your deadline, consider filing a tax extension.
Also, figure out how you’ll file your taxes. Will you be doing it yourself or using a CPA? Pro tip: if you’re already a Bench client, we can connect you to a tax pro through BenchTax and handle all the tricky tax time details.
Ready to start off 2021 on the right foot? Check out Bench and get one month of bookkeeping, free using this link.