There was an article that first appeared in the February 2006 issue of Entrepreneur that is about finding focus and fine-tuning your business. We all get lost in the details and day-in-day-out stresses of management. Our second post shared by the DFW B2B team outlines the one aspect everything comes down to…money.
Money might not be the root of all evil, but it is the cause of many headaches for business owners. Here are five tips for managing your money better:
- Bank on it.“One of the assets business owners have is their cash,” says Manny Calzon, vice president and finance manager for the central district of Merrill Lynchin Tampa, Florida. But many entrepreneurs don’t understand how much they’re paying in service charges to their banks every month. Request a bank analysis statement that breaks down the generic service charges found in your monthly statement. “You can make an educated decision as to whether you need [all the services you’re] being charged for,” Calzon says, “and if not, [ask the banker to] streamline and reduce costs associated with this account.” You can then reinvest the savings in ways that take the business to the next level.
- File taxes electronically.Companies with $10 million or more in total assets that file 250 or more returns a year are now required to file their 2006 taxes electronically. “Small businesses are going to be scrambling,” says Bradford Hall, managing director of Hall & Company CPAsin Irvine, California. “They’re going to [need] an automated payroll service that files electronically for them.” So get a head start now to make life easier later on.
- Pay now, not later.Can you pay smaller bills in advance? If you have a monthly bill for $15 but opt to pay $90 for six months of service, you’ll save $1.95 in stamps and you won’t incur late fees. Best of all, you’re not wasting time paying bills.
- Upgrade your accounting systems.“A business that’s projecting $10 million-plus [in sales] should be on a sophisticated system,” Hall says. Software packages such as BusinessWorks, Enterprise, Great Plains (which was recently acquired by Microsoft) and MAS 90 offer increased sophistication for a growing company and will make life much easier come tax time or, heaven forbid, an audit.
- Make your (bench) mark.It’s common for growing companies to do business without understanding how they stack up against similar companies in their industry. Most likely, your accountant has industry profit and overhead statistics at the ready–data you can keep on file for future strategy sessions without having to do your own legwork. Says Hall, “Businesses aren’t taking advantage of it.”
- Obey the urge to merge.You might pay slightly more, but renewing all your insurance policies on the same date with the same agent lets you sit down once a year to review insurance for the entire business instead of having different renewals pop up three or four times a year. You’ll save time, and your insurance agent “will do better with the full picture,” says Scott Simmonds, owner of Insurance Consultants of Maine, a Saco, Maine, company that helps small-business owners navigate their insurance plans. Check out Simmonds’site orInsuranceBuzzer for tips on 40 types of insurance.