It is said that December 2007 is the time to remember as the cause of what is now referred to as ‘The Great Recession’, which lasted the better part of a decade, before some countries around the world actually saw an improvement in their respective economies. Whether or not the economic collapse in the United States that spiralled outwards around the globe is the ultimate reason why so many entrepreneurs began starting their own businesses or a joint movement away from corporate control of economies around the world isn’t really important.
What entrepreneurs should seek to understand now, is that we are living in an entrepreneurial age where unprecedented numbers of entrepreneurs are striking it out on their own. Are you prepared to grow a company from the ground up? Taking control of your company’s finances is of prime importance and organization is the key core component to doing that. Here are a few tips for taking control of your company’s finances – and keeping control for continued growth.
1) Form a Corporation to Separate Personal from Business Resources
Historically, many countries around the world model the way in which they regulate companies after that of the UK. What this means is that by forming a corporation you have now just formed a new entity that can be kept separate from you, as an individual. By separating your personal resources from those of your corporation, your home and family are protected from huge financial losses if your company should ever fold. This is a key step, and the very first one, an entrepreneur should take. You can’t hope to organize your company’s finances if they are comingled with your personal finances, and in many countries comingling is against regulations; separating saves you, not only financially, but legally.
2) Seek Financial Advice before Mistakes Are Made
Most often an entrepreneur has an idea which they feel will offer something above and beyond what is currently available on the market. They build a business plan, seek funding, and then hit the road running. Unfortunately, being good at your industry does not necessarily make you a good business man or woman. It is here, before you make any mistakes which could put you out of business even before you get off the ground that you should seek financial and tax advice for your newly formed company.
It doesn’t matter what country you register to do business in because companies like RSM Global have affiliate accountants and tax consultants who are part of a large global network. Financial and tax advice is available specific to your country and that is the advice you should follow. Yes, much of the free world operates on principles established by UK corporate law many, many years ago, but the divergence is wide enough that finances should, and will, be handled according to regulations set forth by your particular government. If you don’t know where to turn, RSM is a great place to start.
3) Utilize Suitable Financial Tracking Software
There once was a time when entrepreneurs had to buy expensive accounting software that was loaded on their business’ computer and that is where they logged anything and everything financial. From invoices, to bank accounts to payroll and tax calculations, this software was how they sought to stay organized come tax time.
Today, it is actually cheaper and more efficient to contract with a provider of Cloud-based financial software because you aren’t taking up precious resources on your local hard drive and the right services are expert in security and data backup. Too many entrepreneurs and directors of SMEs lose vital information because they simply aren’t prepared to handle technology this advanced.
4) Hard Copies Are Still Critical – Keep Them Safe and Well Organized
Countries around the world are placing an extreme amount of importance on the ecology, and rightly so. If we continue to use our natural resources at the rate we currently are, the impact on the environment will be severe. The earth is in crisis. Even though there has been a huge political push in many of the world’s leading global nations, it is imperative to understand that we cannot go totally paperless at this time. We can drastically cut our consumption of paper goods, but hard copies are still needed much of the time.
If you have contracts that have been signed and are required by law to be kept for a specific length of time, organizing and keeping those documents is of extreme importance. You never know when you may be required to reference them at some future point. Don’t forget about learning to organize and track hard copies as well as learning to navigate and utilize financial software for your business.
The Connection between Organization, Productivity and Profitability
Organization is key to productivity, which in turn, is key to profitability. The best advice for entrepreneurs is to take time to learn ways to organize every aspect of your business so that it flows smoothly, avoiding costly delays. Time is money, so the more time you waste due to lack of organization, the more money you waste as well. You are in business to make money so don’t waste it!