Keeping Track of Your Finances

For business owners, the most important thing to remember when it comes to running your business is to document everything. From keeping receipts to processing the employee payroll, it all has to be written down or entered into a system and kept track of for the IRS to determine tax to pay.

That means it's important to develop good habits around your bookkeeping and record keeping from the beginning, as it's critical to keep track of the money coming in and going out of your business.

Pen, paper and a shoebox

Believe it or not, some small businesses still use this method, and if their business is small with very few transactions, it's just as effective as software. Just because a system is “old” doesn't mean it won't work.

They may not have the latest payment technology either, as they could be invoicing their customers or are being paid on the spot by cash or check. If this is the case, you'll need to keep:

• All your receipts, both for making and receiving payments.
• Track of your past, present and future jobs in a receipt book.
• A written record of who your customers are, how often they call and how much they pay.

A spreadsheet

Another option is a simple spreadsheet, which can be a good option when you're just starting out or the business is part-time and you're trying to keep expenses low. If your business becomes more complicated down the road, you can make the move to accounting software.

Using a spreadsheet means you can:

• Set up your own basic accounting system to track invoicing, calculations and setting up a budget.
• Give the records to your accountant so they can export to their software to process your accounts.

Accounting software

If you're serious about starting a business, it's probably wise to subscribe to accounting software (many are free) that links to your bank account. It's a foolproof way to document everything you need to collect, and you'll reduce the risk of errors. Good software will do a lot of the thinking for you, as it'll have features to generate professional-looking invoices, keep track of who owes you money, help you enter everything accurately for your accountant at tax season and remind you when things are due.

If you use cloud-based accounting software, you'll gain increased benefits such as:

• Seeing all your accounts in real-time. The software will link to your bank account, so all you need to do is view your cash position inside the software.
• Increased security such that if your computer crashes, your data is backed up in the cloud. Or, if someone steals your laptop, your financial data will likely remain safe.
• You can view your financial data anytime, anywhere as long as you have an internet connection and device.

Keeping track of your cash

Whatever you decide to go with, a good system will allow you to make better decisions based on what's happening in your business now and in the future.

It's important to identify trends that can help you make decisions and, down the line, grow your business, such as:

• Which products and services generate most of your revenue
• Which customers provide the bulk of your sales
• Where your money is going and the highest costs
• Who pays late and needs chasing
• Which products make the best profit margin

Understanding the cash trends of your business means you're in a better position to improve your profit and can spot ways your business can improve.

Heritage Direct can help!

Heritage Direct, our business online banking software, is a great tool for keeping track of your finances. It allows you to see a holistic view of your business: payroll, balance and transaction reporting, recurring payments and transfers, ACH and wire payments, online statements, user accounts and more.

Not only that, but the interface is completely customizable, with drag and drop widgets that are tailored to each user's unique needs. Widgets are small components that allow you to quickly see information or perform a variety of common tasks, like making a payment, transferring funds or stopping a payment on a check.

Then, when a user downloads and opens the Heritage Direct mobile app, they'll see the exact same personalized workspace as they do on their computer, a great feature for those small businesses who do most of their business on the go.

Other features include:

• Up to 365 days of balance and transaction reporting history
• Direct Connect with Quicken & QuickBooks
• Customizable security controls
• Single sign on for remote deposit capture—meaning no extra username or password to remember