These days, more and more people are choosing to set up their own businesses. Whether a side hustle or a full-time gig, there are multiple benefits to freelancing or starting an online business. In addition to being your own boss, the earning potential is limitless when running your own business.
That said, many freelancers and online business owners struggle with managing money — especially if they're new to it. The good news? Improving your small business finances doesn't have to be overly complicated!
This blog post will walk you through some easy money management tips to organize, manage, and boost your finances. Get the details below!
5 Ways to Improve Your Business Finances
For many freelancers and online business owners, bringing in money is their top priority. While making money is definitely important, you have to know what to do with your income even before your invoices start getting paid. Once you have the right processes in place, you can more effectively manage your business finances.
1. Separate Personal & Business Finances
If you're just getting started as a freelancer or online business owner, it can be pretty tempting to use your personal accounts to collect payments and pay bills. While this strategy might seem simple, it can actually complicate things pretty quickly — especially if your business begins to grow faster than anticipated.
So, first thing first: open a separate checking and saving account to manage business expenses. Separating your business finances from your personal finances keeps your financials clean and easy to understand. It also makes it easier to track your business expenses and income and gives you an accurate idea of how your business is performing over time.
2. Use Accounting Software
Whether you're a finance whiz or only have a slight understanding of basic accounting, using accounting software is a great way to keep your business finances organized. Using it to track income and expenses is a huge help not only in managing your finances from week to week but also makes filing taxes much more manageable.
There are also plenty of benefits when it comes to tax season. Using accounting software to track expenses makes it much easier during tax time. is much more manageable than doing it all at once so you can file your quarterly or annual taxes on time.
As for which accounting software to use? Well, there are plenty of options out there.
If you have a limited budget or just need something simple, WaveApps is an excellent free option. In addition to tracking income and expenses, you can use it to generate invoices, proposals, and various reports and collect payments directly through the invoice. If you're looking for something a little more robust and customizable, consider a paid option like FreshBooks.
3. Analyze Statements & Track Spending
Keeping track of the money coming in and going out can be tricky when you've multiple clients, expenses, and about a million other things to manage.
If you automate payments, be sure to analyze debit and credit card statements regularly to make sure the charges line up with your expectations. If you find yourself frequently paying for a tool that you don't use that often, consider canceling it to reduce spending and help boost your profits.
4. Schedule Weekly Financial Check-Ins
Take some time every week to review your finances. Block off a 15-30 minute chunk in your calendar to enter expenses and generate new invoices for the week.
Weekly financial check-ins might seem like overkill, but it only benefits you in the long run. It helps you keep an eye on outstanding invoices, ensures expenses are getting paid on time, and can help identify areas to cut back and save. You can also use that time to see if you're on track to hit your monthly income goals or brainstorm ideas to get new clients and boost your monthly income.
There are also plenty of benefits when it comes to tax season. Using accounting software and tracking expenses weekly is much more manageable than doing it all at once so you can file your quarterly or annual taxes on time.
5. Optimize Lead Creation
If you're trying to make more money and attract new clients, optimizing your lead creation efforts is a must. Some quick ways to do that include:
- Use marketing channels and methods that will enable you to reach your target audience
- Engage with customers on social media or via email marketing
- Include a FAQ section on your website
- Utilize SEO to increase organic leads
- Generate leads with paid advertising and pay-per-click campaigns
- Promote your brand, products, services, and offers on social platforms
- Host giveaways to get more followers and boost conversions
- Make use of innovative tools that reduce risks in terms of losing sales
Adding live chat to your website is a great way to handle inquiries or offer help and advice outside of normal business hours. Look for the best live chat software for small business applications, which will help enhance the customer experience, create more leads, and generate more sales.
Make Managing Your Business Finances a Priority
As a small business owner, there is a lot to keep track of, but making your finances a priority is important. The more often you review your business finances and take measures to keep them organized, the better off you'll be. These five tips will help you stay on track, even as you begin to grow your online business!
Want even more money management tips? Check out 5 Tips for Managing Money as a Freelancer and How to Earn Consistent Income as a Freelance Writer.
Leave a Reply
You must be logged in to post a comment.