Most Popular

Ways to Manage Your Finances When You Are Self-Employed

Three Tips for Business Owners

Whether you are new to self-employment, or have been self-employed for several years, managing your finances as a business owner is a challenging task. Between working toward a profitable business, paying your taxes, and handling your personal finances, dealing with financial matters might seem overwhelming. If this is true for your current situation, not to worry. There are basic steps that you can take to gain control of your finances in a hurry.

Explore these three top tips for helping you manage your finances as a self-employed business owner.

Prepare for times when business is slow

Inevitably, all business owners experience fluctuations in the amount of business they receive. Some weeks are highly profitable, while others are painfully slow. That’s why it is important to prepare for the times when business isn’t great. When you are experiencing higher levels of business, put aside extra funds to cover expenses when you don’t have as many clients or customers. This will ensure that you’ll be able to cover all of your bills on time, pay your employees on time, and pay yourself.

Keep your business and personal finances separate

According to Global Resources Business Reviews, it is essential for entrepreneurs to control their costs in order to maintain positive cash flow. Without an accurate way to track your business spending, you won’t be able to properly assess where you can cut back on spending. That is why it is crucial to keep your business finances and personal finances totally separate. Mixing your personal expenses in with your business expenses makes it far more challenging to monitor your costs, and can add avoidable complications when it is time to file your tax return.

Speak with a tax professional as soon as possible

If you aren’t already working with a tax professional, now is the time to do so. This is especially true if you’ve recently become self-employed. Making mistakes on your tax return (especially when it comes to putting aside enough to cover the taxes you owe) can be costly. To avoid a stressful financial situation, it is best to hire a tax professional as soon as possible. Working with a tax professional will ensure that you are receiving the maximum amount of credits and deductions, and will help prevent major errors on your return. A tax professional can also help you figure out how much to pay quarterly to avoid having to pay a large sum when you file your taxes.

Staying financially prepared when you are self-employed

If you are feeling overwhelmed as you manage your business finances, now is the time to regroup and gain control. Follow the steps listed above as a way to begin organizing your business and personal financial life. It is when you feel refreshed and organized that you will be able to move forward toward your bigger, long-term financial goals.