One of the hardest parts of managing a small business is staying on top of finances. While we can’t teach you everything you need to know to become the world’s #1 financial analyst, we can share a few tips to set you up on the road to financial success. 

1. Know your balance sheet

A balance sheet is the foundational building block of any good budget, so it’s essential to understand what it is and how to interpret it. A balance sheet is like a snapshot of your company’s finances: it shows your assets, liabilities, and equity at a specific point in time, and gives you an idea of the income and expenses from the period before that point. 

At any given time, you can consult a balance sheet to assess the health of your organization. Is the margin between your income and expenses too close for comfort? Or are you taking in plenty of money compared with the amount you put out? 

You can also look at your balance sheet to predict future finances, estimate how much things will cost, and figure out how your income and expenses fluctuate throughout the year. 

2. Consider getting an accountant

If you have a small business and are a financial wizard, you may be able to handle all  your company’s finances and accounting single-handedly, but we wouldn’t recommend it. For one thing, you may not be a financial wizard, and for another, you’ll be busy running your business. 

A certified public accountant (CPA) or bookkeeper can help you better track and manage finances so you can focus on other things. You may be able to outsource if you don’t want to hire a full-time employee, and this can help make working with an accountant more affordable. 

If you don’t want to use an accountant, then at the very least, you should invest in an accounting program like QuickBooks. This will make things like invoicing, expense tracking, and financial reporting so much easier, and save you a lot of headache down the road. 

3. Plan for taxes

As you track finances, budget, and plan for future expenses, don’t forget one of the biggest expenses of all: taxes. If you’re a small business owner who doesn’t have taxes subtracted from your paycheck, you may want to make quarterly estimated tax payments rather than pay in one big lump at the end of the year. 

Either way, it’s a good idea to start each year by looking at what you paid in taxes last year, estimating the difference between last year’s and this year’s income, calculating your taxes accordingly, then setting aside money each month to make that payment.