Many sign business owners are easily scared off by the financial side of business. Sure, they know income and expenses should be meticulously tracked, but it is so easy to let these tasks fall by the wayside. Other sign business owners are diligent in keeping the books up to date, but fail to use financial insights to contribute to the growth of the business.
Even if you hire a financial manager, that doesn’t absolve you of the responsibility of being involved and informed of the business’ financial state. If you don’t hire someone to manage your finances, you will have to do it yourself. While it may be intimidating at first, good bookkeeping starts with getting things organized, and can be broken down into these three basic steps:
- Save records of expenses and income and organize them. Managing finances begins with keeping track of the money the business spends and the money it earns. To do so you will need to organize receipts and records of expense, and make sure you save all income receipts as well, such as paid invoices.
- Use bookkeeping software. Set up a time, daily, weekly, or monthly, in which you enter your expenses and your income into bookkeeping software, such as QuickBooks. (A good one made for sign shops is SignTracker.)
- Generate financial reports. Periodically and systematically review the profit and loss of your business with a financial report. This will reveal how your business is doing.
Financial reports is where all the useful data is located. It will compare your monthly income to your monthly expenses and reveal if you are earning enough to cover the costs of running your business.
Benefits of Financial Management
Reading financial reports associated to your business puts the data you need to make smart decisions in your hands. Look for any patterns in the financial reports that can cue you into action regarding certain opportunities. Financial reports can help in the following ways as well:
- Reduce taxes. Plan your purchases and time them in a way that will set you up to deduct them. Being organized will help make sure you don’t miss claiming any deductions.
- Provide more competitive prices on services and goods by cutting back at unnecessary expenses.
- Watch your business’s cash flow to make sure you pay bills on time. Keeping track of cash flow also makes sure you are ready with enough money to fulfill payroll, pay taxes or handle other major expenses.
Start familiarizing yourself with the financial management aspect of your business. If you still feel unsure, consult with an accountant or an experienced bookkeeper who can better orient you in the world of financial management. Remember your goal isn’t simply to have them walk you through your business’s finances, but rather to receive an education that will enable you to manage (at least some) of the finances yourself.