Practical guide to organizing small business finances

Self-employed professionals and entrepreneurs who own small businesses often have to deal with different aspects of running a company that may not be their specialty. This includes organizing your finances to stay in the black and have room to grow, improving the workplace and investing in new tools and solutions.

There are some ways to deepen your knowledge regarding the economy, such as following newspapers and profiles focused on the topic or even taking online courses that will teach the basic principles of a company’s financial management.

An entrepreneur’s routine, however, can be inconsistent and even basic organizational issues can be left aside and, at the end of the month, interfere with closing the cash register.

But do not need be like that! Creating some habits and having the help of tools can prevent notes from getting lost and allow you to create better control of what comes in and goes out. Therefore, in this text we will create a guide with important tips to help with financial control , as well as suggesting applications that can help with this management.

Practical guide to organizing finances

Separating personal and professional expenses can be difficult for MEI employees, but you need to have your own account for the business and treat the company as exactly that: a company.

This is the only way to be clear about what comes in and goes out, and how much cash is available for investments and emergencies. In light of that, look at our tips underneath:

Map your costs

With your own account for your business, just a bank statement allows you to see what was received and spent. This needs to be transferred to a spreadsheet, which must always be organized.

This allows you to check what the fixed and variable expenses are. Fixed costs generally include amounts such as rent, electricity, water and internet, as well as necessary materials, such as office and cleaning supplies.

Variables may include raw materials, emergency costs, deliveries and other unforeseen expenses.

Know how to price

To be competitive or enter the market, many professionals end up opting for lower amounts or at the limit of what they spend. However, this is not sustainable in the long term, and can prevent the company from making profits. Therefore, know how to price and opt for other alternatives that help customers see value in the service or product, such as marketing actions .

Know your taxes

Regardless of the type of company, such as MEI or ME , there are taxes to be paid. In the case of micro-entrepreneurs, this amount is fixed and must be paid monthly. To avoid future problems, especially when you have to declare income tax, understand what amounts must be paid and already include the fixed expenses for the month.

Have a reserve for emergencies

Unforeseen events happen and, as much as no one wants to go through that, you need to be prepared for the unexpected. And that doesn’t just mean a problem. Is it important to have money in case there is a plumbing problem? Yes, but the reservation can also help if the month has been better than expected and extra purchases are necessary.

Doing financial management

The tips above serve to guide financial administration and with them it is possible to establish adequate management. However, in practice it is a little more laborious and requires planning and physical and digital organization. Here’s how to get started:

Establish an organization routine

It may be that, throughout the day, it is not possible to organize the invoices, but it is necessary to set aside a moment, either at the end of the day or once a week, to put the papers in order and write down what came in and out, creating an organization routine .

To help, use folders with dividers and separate them by month, or select digital folders, naming the files appropriately. This will save time in the future and prevent documents from going unnoticed, causing headaches later on.

Choose a system

Some people adapt well only to Excel and are able to use the spreadsheet tool as their management document. Others, or even in cases where the operation is a little more complex, will need management software.

Regardless of the format chosen, however, know that it is necessary to use an appropriate system to make it easier to visualize these numbers and extract reports and important data from them.

Plan your growth

Of course, no matter how small the business is, the idea is for it to grow. And for expansion to occur in a healthy way, without taking a step too far, financial planning is necessary.

Thinking about the long term, such as where the company could be in one, three or five years, is important to develop the appropriate strategies and this allows you to understand how much money can be invested.

Let’s say the owner of a small store wants to expand its physical space. He knows he needs to increase revenue to be able to pay a higher rent, and is able to structure himself to increase sales focusing on this change.