HOW TO establish clear business financial practices (from the get-go!)
2019 here we come!
We’re all super excited to see those first sales come through this year but are our financial systems set up to continue growing, not only a profitable business, but also a sustainable one? If this question made you stop and wonder, then you might want to keep reading! I want you to set your business up for success and that’s why I’m spilling all the beans!
Establishing clear financial practices in your business is not as hard as you may think. I’ll share with you 4 practical ‘build-upon-each-other practices’ for setting up the proper systems, like a business bank account, a recordkeeping software, a CRM system, and most importantly, I’ll share some pro tips on how getting a business/cash flow budget setup to track revenue and expenses, as well as business financial goals and strategic decisions, could be life changing!
1) Get yo’ self a business bank account!
First things first… it all starts with the money, most importantly, where the money is deposited post booking. If you’re still using your personal bank account for all your business activities, I’d recommend you drive up to your nearest bank and open up a business checking account, like yesterday! Not only is it harder to keep track of business related income and expenses when it’ll all combined with personal, but it could also translate into unnecessary hours (and potentially, dollars) of bookkeeping and tax-related transactions come tax time. It’ll also make the next few steps a total nightmare!
2) Recordkeeping is your business’ bloodline!
It’s true! At the end of the day, it’s a business and not a hobby if you’ve got sales to show through. Want to know where those “sales” or better yet, records, live? In your recordkeeping system. Having a bookkeeping system in place, is definitely step 2. I love how most (if not all) of the recordkeeping systems out there have made it super simple for us to simply link up our bank accounts to it and see all the transactions being magically fed. This gives us back countless hours of manual inputting and most importantly, cuts back on so many human errors and missed transactions. Now, remember how I mentioned getting a business bank account previously, imagine if you were still using your personal checking account and linked that up? It would feed all your transactions, personal and business (it can’t tell which is which). Leaving personal transactions in there would mess up your books entirely, making them inaccurate and good for nothing, and seating there deleting one by one is just a nightmare!
Pro recs: Here are a couple of recordkeeping/bookkeeping systems I’d recommend: Wave (best free option for starters) and my favorite, Quickbooks (super user-friendly and with an option to meet your every business level/stage)!
3) Your CRM system brings it all full circle!
You may think you’re all good to go now but.... I’m 100% all about cutting down on cost and automating. Automation is freedom, baby! Setting up a CRM system that automates and integrates with your recordkeeping software (which is already integrated with your business bank account) helps keep everything streamlined. See, the moment your CRM system, your recordkeeping system, and your business bank account talk to each other, you could do away with countless human errors and manual inputting from system to system. Using a CRM system like Honeybook (pro rec: my absolute favorite!), you could convert a potential client into a booked client by sending a proposal, an invoice, and a payment schedule. Once you’ve turned your potential client into a booked client, your payment will come straight into your business account, letting your Honeybook invoice know it’s been paid and having Quickbooks integrated with your Honeybook, will help to keep your financials in sync. That means your financial reports in Quickbooks will align with your bank account and CRM pipeline. See how everything is streamlined and automated?!
4) Cash flow budgeting will save your life (and business)!
You may think you’re all set, and that may be true, if you want to continue growing a profitable business, but if you want to make sure you’re doing so sustainably (meaning, you’re preparing for the unpredictable ups and downs and slow seasons that come with the territory), you may want to keep reading! Getting a business budget set up to track your revenue and expenses, as well as business financial goals, could be life changing! After setting up all your financial systems, you now know what your financials look like which means you know what your revenue and expenses are. Knowing that, you can then predict what your month will look like, explore what expenses you could cut back on, how many more clients/ packages you could pursue, and start to set realistic financial goals and make strategic decisions that are backed up by figures rather than emotions.
This year (and every other year after that), don’t be an employee in your business, be the BOSS! What’s the difference? The boss knows exactly where his/her business stands financially, sets and achieves his/her financial goals, and makes strategic decisions that are always well-thought out and financially backed up!
Take a look at these financial components today and see if you can identify some of the hurdles holding your business back. If you need help, schedule a free coffee chat, it’s free so you’ve got nothing to lose!
** This blog post includes an affiliate link for a tool we love and use. If you make a purchase through it, we will make a small commission.
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Geily Romero is a Money Management Strategist helping creatives get ahead of their business + personal finances over at Cutting Edge. She offers Money Management Strategy packages and Business Coaching Strategy Sessions,