8/15/2018

Handling Small Business Finances With Just Pen And Paper

Being new to the world of business, the task that everyone else in a similar position to you does can seem daunting. They have already been doing these things for years and years, while you may have only just come into age. Small business finances can be easy and simple, or they can be needlessly complex and time-consuming. The tracking and logging of logistical equipment buying, renting, loans, contracts, deal, as well as sales and savings are just some of the things you’ll be introduced to. There are some great ways of doing all of these financial tasks online and using modern software to help you keep tracking of savings and spendings. But even these software options have to be properly studied, applied and improved as time goes by. What if you need to track your business finances right now and don’t have the option of waiting to learn Excel or similar software? Well, the old methods that were used before the computer age are still valid and could make life so much easier for you.
   

Simple in and out 
The bulk of your transactions can be made simple. There’s no need to make things complicated when it comes to working out what comes in and what goes out in your business. Make two lists, and label them incoming and outgoing. Write down all the things that you buy for your business. This could be equipment that you rent, such as vehicles, industrial kitchen appliances such as dough mixers, or maybe the property you rent for your business. Calculate these expenses for a month. Now list what is incoming, meaning what you make a profit on and how much. Obviously, this is a lot more simple as the sales figures you have will do most of the work. Selling your products and services will be the main source of income. Other sources might be partnerships that you make, or investors that come aboard. Tally up the figures and then compare them side by side. Take away the expenses you make from the profit you make, and you have a basic answer of how much profit or loss you’re making each month.

   

Who are you paying?
 If you have hired employees, one of the largest expenses you’ll make is to pay them their salary. Making such a consistent and large payment every month should be tracked and studied to make sure you’re not overly paying them; or not enough for that matter. Use a paycheck template to properly organize what you’re paying them for, how much, when it is due and any tax deductions you make from their pay such as for insurance programs you offer. Employees aren’t the only people you pay. You also make off the payments to various individuals at times, such as for appearing at events, speaker privileges at conferences, commissioning reports on the industry you work in  from freelance financial advisors etc. Write down how much you pay them and for what services they give you to track who you’re doing business with. During the Industrial Revolution, they used candlelight, and quill pens and paper to handle all the business finances. If you’re not comfortable using modern software or simply don’t have the time to, then keep things simple by emulating what happened during that time for your own business.

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