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Business Budgets: How to Save Money and Manage Funds Efficiently
by Rachelle Wilber Wed, 06/08/2016 - 08:45
Many business owners are completely focused on increasing revenue. Of course, this is important since every business needs a healthy cash flow to thrive. However, it is just as important to look carefully at overhead and costs. The growth of your business depends on the bottom line just as much as on increased sales. Saving money and managing your funds efficiently allows you to have more money available for you and your team. Here is a look at some ways that you can budget for the effective use of your funds.
Pay Attention to Taxes
Taxes can be complex and tricky even for the most organized business owners. They can also be a source of major savings if handled correctly and major losses if they are neglected. Start by getting in touch with a CPA so that the tax situation from the past year can be assessed and so that next year's payments can be estimated. This can keep you from being liable for underpayment and can also help you to avoid overpaying. Your CPA can help you to come up with a long-term plan for paying taxes, which can make this part of your business considerably less stressful. When meeting with a CPA, you will need all of your records including your expense reports and employee W-2 forms.
Cloudsource, If Possible
When you bring a new employee, you will have to spend time training them in addition to paying for vacation time and sick leave. A much less expensive option involves hiring freelancers who work remotely and who can perform the same tasks for a much lower cost. There are many qualified freelancers who choose to work for themselves and who can be found on a range of reputable freelancing sites. You can hire according to your needs and for set lengths of time. Cloudsourcing can keep you from having graphic designers, writers and web developers on your payroll full-time thus helping you to cut your costs significantly.
With drop shipping, you can save money on shipments and returns. Getting a Doba review can help companies connect retailers with multiple drop shippers so they can have a constantly-changing inventory. Similarly, you do not have to spend on shipping supplies like boxes and bubble wrap. You simply pay the drop shipper the wholesale rate and apply your markup. You also save on the costs associated with managing an inventory. Those savings can be applied to marketing and product research.
Cut Out Finance Charges
Business owners often find themselves saddled with numerous unnecessary expenses ranging from credit card processing fees to late payments on loans. You can save your business a lot of money simply by ensuring that your bills are paid on time. Of course, this is easier said than done and making sure that your business's bills are paid on time can be more complex than balancing your own checkbook; however, you have the option of using online payment services to simplify the process. Also, look around for better options when it comes to costs like processing fees and business credit card membership fees. You may be able to find lower rates elsewhere.
Keep Personal and Business Funds Separated
The separation of business and personal funds is mandatory for an LLC but is a good idea for any type of small business. Separating funds allows you to stay organized and makes managing your taxes a simpler process. In addition, you will be able to track your financial records with greater accuracy. If you ever decide to sell your business, keeping your personal and business funds separate can also make the sale easier. Consider getting a credit card for business expenses as well as business checking and savings accounts. The process of separating funds can be made easier with an Employer Identification Number (EIN), which is a tax number that is assigned to your business. The IRS website will provide you with one of these numbers free of charge. You will use this number when opening your checking and savings accounts.
Saving money and managing your funds efficiently means more profits for you. By following the tips above, you can save money regardless of the economic climate.
About the author
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor's Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing.
When she isn't on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and