Financial Health Checklist

Managing your business’s finances is a necessary part of running a business, as well as staying on top of the state of its financial affairs.

Here is a checklist that would help you in managing the financial health of your business efficiently.

1. Set a Savings Goal

The earlier you plan for your financial future, the more your money compounds over time. Use numbers and dates, not just words, to describe what you want to accomplish with your money. Also, consider your debts; how much do you want to pay off, and when? How much do you want to save, and by what date?

2. Make and Follow a Budget

A budget is very crucial in ensuring that your finances and expenditure are visible to you. For example, you can highlight all your business expenditures in your budget, and it can provide you with a clear perspective of all the numbers that you need to keep an eye on.

3. Track Your Expenses

You need to keep track of your business expenses because this would determine when you need to spend money, and when you need to hold back. Tracking your expenses is one of the key factors in making your budget work for you. If you do not know how much you have spent each month, you cannot tell when you have overspent. Beware of little expenses; a small leak will lead to a bigger leak and drown a great ship.

4. Pay Off Debt

While a small business loan can be a valuable resource, it is important that you are responsible with spending and repaying it. When taking out a loan, you should remember that paying back the loan is a priority and a loan does not just end with getting a loan. Paying off your debt helps to increase your credit score and frees up money to buy the things you enjoy. Click here for tips on how to get out of debt fast.

5. Pay Yourself

The goal is to make sure that enough income is first saved or invested before monthly expenses or discretionary purchases are made. Automatically allocate a portion of your income to go into your savings and investment accounts.

6. Establish an Emergency Fund

Save money and money will save you. Having a business savings account allows your business to enjoy financial security. Setting cash aside for an emergency fund gives you something to fall back on in case an unplanned expense comes up.

An emergency set aside to cover financial surprises life might throw your business’ way should have enough money to cover at least 3 to 6 months’ worth of operating funds to run the business.

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7. Pay Taxes

You need to make sure that you keep on top of your taxes as a small business. In order to keep an eye on your taxes, mark all the relevant dates in your calendar and diary. It is recommended that you get help from a small business accountant to help direct the complex tax calculations.

Originally published at https://blog.biznurture.loan on April 15, 2021.