Whether you are a first-time entrepreneur or a seasoned business owner, managing your finances might feel like a part-time job. Simple tips can help you organize your funds, optimize your time, and decrease the stress of business money matters.
1. Keep all of your bills in one place
When the mail or email arrives, place it in a single physical location or computer folder. Misplaced bills might result in unwelcome late penalties and harm your credit rating. Be consistent, whether it’s a drawer, a box, or a file. Size is also an issue. If you get a lot of mail, choose a location that won’t fill up too quickly. If it is a virtual location, make external backups or save the files on the cloud to not lose them because of unfortunate hardware failures.
2. Pay Your Bills On Time
Bill paying can be made easier if done at regular intervals throughout the month. Depending on how many invoices you receive each month, you can schedule times when none of your bills will be late. If you pay bills as they come in, you’re probably spending too much time in front of the checkbook. Even if a bill says “Payable Upon Receipt,” there is always a grace period. Call the creditor to find out when the debt must be paid before it is considered late.
3. Make Use of Automatic Payments
Most banks allow you to have money deducted automatically from your account to pay debtors. Furthermore, because they collect their money faster and on time, creditors frequently give a cheaper interest rate when you sign up for this payment option. Think of it as one less check to write, envelope to lick, and stamp to purchase. Just make sure to document the deduction when the automated payment is set up, or else you risk having subsequent checks bounce.
4. Automate Your Checkbook
A software program can help you organize your funds. These simple apps, whether Quicken(r), Microsoft Money(r), or another, make bill paying and bank reconciliation a breeze. Computer checks may be ordered practically anywhere and are compatible with the majority of printers. When you print the checks, all of the information is automatically saved in your electronic checkbook. Furthermore, many banks provide direct downloads into these software packages, so that when money is placed or withdrawn, the transaction is immediately recorded on your computer. And when it comes to taxes, it couldn’t be simpler.
5. Purchase Overdraft Protection
Most banks offer a service in which, if a check bounces, the funds are transferred from another account. For a small cost, the bank will link your checking account to a savings, money market, or credit card, saving you the embarrassment of a bounced check. Call or visit your bank to learn more about this useful tool.
6. Examine Your Credit Card Bills
Most consumers take advantage of low-interest credit card offers, but many never examine their accounts when it comes time to pay their bills. Credit cards are known for luring new consumers with low-interest rates, only to convert to higher rates after a few months. Make it a practice to carefully examine your monthly bill to determine what interest rate you are paying and whether any transaction fees have been imposed. If your interest rate rises or a transaction charge shows on your statement, a simple phone call to your credit card issuer can frequently help you resolve the issue. If not, try to switch your money to a better rate.
7. Consolidate Accounts
Credit card account consolidation is certainly right for you if you have many accounts with outstanding balances. Check the balance transfer interest rates and one-time costs carefully. Make a note of all your open Money Market, Savings, CD, IRA, Mutual Funds, and other accounts to see if any can be consolidated. Keeping your money in fewer places decreases the amount of guesswork and blunders.
8. Cancel Inactive Accounts
Write a letter requesting that the account be formally closed, whether it is a credit card or a bank account. This will not only boost your credit score but will also help you avoid having money spread all over the place. Don’t let department stores and credit card firms entice you into opening new accounts with low-interest rates and purchase discounts. Taking advantage of every credit offer that comes your way can quickly lead to a credit crisis.
9. Set up Automatic Savings
Create a link from your checking account to an untouchable savings account. This is normally done through the banks, and automatic payments are made each month. The majority of people do not save money regularly. They may wait until they receive a substantial tax refund check or another event to deposit funds into savings, retirement, or other accounts. If you set up a monthly automatic savings deposit, your accounts will begin to accumulate funds faster than you expect.
10. Organize Your Files
Ensure that your paid bills are stored in a file cabinet or a computer archive. Maintain separate folders for paid bills. At the end of each year, go through your files and discard any bills or receipts that are no longer needed for auditing purposes. Contact your local IRS office to find out how long you must keep records for audits. Normally, federal tax returns can be audited three years ago, but canceled checks may need to be retained for seven years. Look for auditing and record-keeping practices for your state or region on the internet.