How to Keep Up With Your Business Finances

When running a business, it can be incredibly difficult to understand your finances. However, keeping up with your business’s finances is of the utmost importance and should be one of your main priorities while running a business.

Although it can be easy to lose control of your finances, there are many ways in which you can be sure that you are able to track your expenditure, understand your taxes, and know your profits, some of which are explained below.

  1. Hire an Accountant

One of the most profitable steps that you can take if you struggle to understand your finances is to hire an accountant. Accountants can deal with all your finances for you, and prepare you for the tax year. Not only this, but chartered accountants such as Howlader & Co build a professional relationship with you that can help you to get the most out of your business financially and ensure that your business can be tax efficient. This helps businesses to ensure that they are paying the right taxes, know how much profit they are making, and organize their finances accordingly, taking away the stress of dealing with the complicated tax system alone.

  1. Understand Your Taxes

However, if you plan to control your business finances alone, you should first ensure that you understand your taxes as a business. Unlike during employment, when taxes are taken straight out of your payslip, running a business means that you have to maintain an understanding and submit your own taxes.

Income tax is based on the earnings of your business, and so calculating this is the first step to understanding how taxes work. However, there are many more implications which you need to consider, and these can affect how much tax you should pay.

  1. Track Your Expenses

To ensure that you are ready for the tax year, you should track your expenditure throughout the year. This will not only help you when it comes to submitting tax forms but also means that you will know how much money you have to spend and invest. The best ways to track your expenses include using apps and spreadsheet templates to create simple and yet effective methods of tracking your expenditure.

  1. Project Your Revenue

Not only this but when it comes to understanding your business finances, it can also be helpful to project your revenue. This will help you to adapt your business plan to the amount of money that you have available to spend, and will help you to prepare for any obstacles – or profits – you have in the future, allowing you to invest in your business accordingly.

  1. Write Invoices on Time

Writing invoices and sending these to your clients on time will ensure that you receive payment as soon as possible, reducing the number of outstanding payments that you have. You should establish a timeframe for payment in your invoice template, as this will give you a reference point so that you know when you will be receiving money and ensure that your money is not outstanding for long. If you have not received payment within a week, then you should ensure that you follow up on these invoices.

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Financial Security: Baby Boomers, Generation X, and Millennials Face Mixed Fortunes

 

Baby boomers, Gen X, and millennials have very different financial experiences. When compared to baby boomers or Generation Xers, millennials have it rough when it comes to finances. They enter the labor force when full-time jobs are few and far between, making the strive for financial independence, marriage, or retirement even harder.

In addition, they have an overwhelming student loan debt that prevents them from achieving their financial goals. Even worse, those who are already working are barely making enough money to cover their bills. Never mind savings. Data from Smartasset show that the average salary of the millennial today is about 20 percent lower than the average salary that a baby boomer earned at the same age.

These unique set of financial challenges make it difficult for millennials to build up rainy day savings or establish themselves financially. For instance, a study by the National Institute on Retirement Security found that 66.2% of working millennials have no retirement savings because they hold off savings in favor of paying off student debt or buying homes.

In contrast, prior generations, Gen Xers and baby boomers exhibit far more financial confidence, thanks to their higher salaries, employer-sponsored retirement plans, and years of soaring markets, which enabled them to plan their financial future.

A Sea of Financial Traps

Another reason why the financial prospects of millennials are less than those of their parents is that they often make bad investments. The quest to live in the here and now and to enjoy life to the fullest has millennials spending money they don’t have to buy items they don’t need.

For instance, some millennials consider buying a new car as against a used one a status symbol. Same goes for luxury cars, expensive houses, premium cable package, leased cars, etc. It’s either these or they are overspending or living a frivolous lifestyle that makes it harder for them to put money toward their top priorities.

The lack of basic financial education also comes at a cost, as does lack of financial goals, their spending without a plan, falling for scams, taking on more student loan than is necessary, rushing into investing or not investing at all. All of these issues delay the ability millennials to secure their financial future. Even worse, it makes them more susceptible to economic vulnerability.

Staying on Track

Millennials will do well to consider measures that will help them climb out of debt quickly, especially if they are to make progress towards their financial goals of building a stable future. Good thing is, they have time in their favor, and so can make the most of that time to improve their finances.

To stay on track, one should first of all design strategies that will prevent them from falling into the bad habit of spending too much or living beyond their means. If you’re the kind of millennial who doesn’t have much or is in debt, your goal should be to earn more and spend less.

This means cutting costs, saving a certain amount every paycheck, establishing a side hustle, having a realistic budget, and buying only the things you need. Also, you should consider hiring a finance expert to help you set financial goals and advise you on how best to invest your money.

About investing, you might want to avoid investing in depreciating assets like cars, which tend to lose 75 percent of their original value within the first 3-4 years. Don’t put a brand new car in your garage if you think that will strain your budget. Instead, consider getting a used car and saving the balance or investing it in a profitable venture.

 

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8 Things Small Business Owners Need to Know About Finance

Figuring out how to manage finances is one of the most challenging things you’ll face as a small business owner. Often, people get into the business world because they have an exciting idea or product to share. The chances are that you won’t have a lot of experience with accounts, taxes and cash flow too.

While learning as much as you can about money matters can seem like an exhausting process at first, it’s something you can’t afford to overlook when you start bringing your company to life. Knowing these 8 simple things about finance will help to keep your organization on track.

1. Sometimes You’re Going to Need a Loan

When you first launch a business, sometimes it’s tempting to try and do everything by yourself. The last thing you want is to be in debt before you’ve ever started making a profit. However, the truth is that most people simply don’t have the capital required to handle the demands of a business without a little support. A loan can be the most useful tool you have when it comes to starting your business, and even overcoming cash flow problems. Just make sure that you compare your options so you can ensure you’re getting the best interest rates.

2. Have a Billing Strategy

No matter how good you are at staying on top of things like cashflow, there’s nothing to say that your clients will be just as efficient. Most companies will have at least one customer that always seems to be late when paying their bills. Too much cash tied up in your unpaid invoices can quickly lead to cash flow problems. With that in mind, it’s important to make sure that you have a billing strategy in place. The good news is that there are tools online you can use to automatically invoice clients and send them reminders when they’re late.

3. You Need to Pay Yourself

When you’re running a small business for the first time, you might find yourself trying to put everything you earn back into the company. Any extra capital is a great way to help your business grow, but you also need to look after yourself and your family too. Remember that you’re playing an important role in your company, and you deserve to get paid for your work. Don’t focus on everyone else and forget to look after yourself.

4. You Need to Spend Money to Make It

This phrase might sound like a cliché at first, but it’s true. If you want to make real progress in any industry, then you need to be willing to invest in yourself and your business. With that in mind, make sure that you take risks from time to time, and invest in your growth. This could mean that you need to take an extra loan out at some point so you can afford to buy additional equipment, materials, or pay for staff, but a good risk analysis will help you to see if it’s worth it in the long-term.

5. You Must Remember to Look at ROI

Speaking of investing in the long-term, it’s a good idea to have a way to track your return on investments. Every time you start pouring money into projects for your business, make sure that you set up a measurement system that will show you which of your strategies are good for your future, and which might not be worth the effort.

6. You Need to Constantly Monitor Your Books

Monitoring your books might be an obvious task for financial health in your business, but it’s something that people often forget that they need to do regularly. If you’re the kind of person who might leave managing cash flow to the end of the month, try setting up an hour in your schedule each day where you can look at your incoming and outgoing expenses and make some crucial notes. The last thing you want to do is neglect your accounts.

7. It Helps to Establish Good Habits

Make sure that you do everything you can to develop good financial habits – even if it just means that you block aside some time at the end of each week to check that everything is running smoothly in your business. Running a small business often leaves you strapped for time, but your financials aren’t something you can afford to cut corners on. Start building good habits for your finances now.

8. You May Need Help

Finally, don’t expect to become a professional accountant overnight just because you’ve decided that you want to run your own business. If you don’t know anything about taxes and deductions, and you don’t have time to learn, then invest in an accountant or bookkeeper to help you. You’ll thank yourself for it in the long-term.

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Life Insurance- Protecting Finances and Loved Ones

 

Life Insurance Coverage

Life insurance is also referred to as life assurance or life cover. It provides financial protection for loved ones or named beneficiaries in case you die during the valid period of your policy. Protecting against financial loss that results from an insured’s premature death safeguards beneficiaries from the financial impact of death.

Aspects of Life Insurance

  • A life insurer pays the death benefits in consideration of the insured’s premium payments. Life insurance entails a contract between a life insurance company and the person with insurable interest. The financial risk of untimely death is transferred to the insurer for a specified premium amount.
  • It is important to note that life insurance is not an investment or saving product and unless a claim is validly made or you have permanent life insurance, there is no cash value.
  • You determine how much cover you need as how long you will need it.Premiums can be made on a monthly or annual basis. Your family has peace of mind knowing that in case while you have the policy coverage, they will be paid when a claim is made accordingly. These funds can be used to cover mortgage payments, child-care costs or household bills.

Dependents

If you have a spouse, children or anyone who depends on you for income or financial help, life insurance is an important consideration. If the income you earn as part of a couple or sole breadwinner helps with household costs, the family may find it difficult to pay bills such as rent or mortgage without that money. Learn more about JUNIPER LIFE INSURANCE here.

If you work from home or part- time, you family may struggle to handle the expenses of finding someone that can look after the children if you are no longer around. Any individual who has dependents is advised to take out life insurance.

Debts and Loans

Life insurance can also be essential if you have an outstanding mortgage, loans or debts. It can pay out a cash sum in case you die during the policy term. The money could be used for the purpose of helping to pay debts or assist the family with daily living expenses and child care costs. It can also help with funeral expenses.

Death Benefit

Death benefit is a term that is used for the cash amount that the beneficiaries of the insurer receive from an insurance provider upon the insured’s death. While the insured determines the amount of money, the insurance provider must establish whether there is insurable interest and the insured qualifies for coverage according to underwriting requirements.

Premium

The life insurance company determines the premium amount required to cater for mortality costs. This amount is typically based on actuary statistics. Main determinants of risk include lifestyle, family and personal medical history and the insured individual’s age. As long as the premium is duly paid, the insurer has an obligation to make the death benefit payment.

Cash Value

With permanent life insurance there is a component of cash value. As a savings account, it enables the insured to amass capital for a living benefit. Accumulated capital can be used for any reason when the insured is alive. The insurer also uses it to mitigate the risk.

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Managing Your Personal Finances the Smart Way

 

As a working adult in today’s economy, you will realize that managing personal finances is essential for survival. The cost of living is at an all-time high, there is more to spend on and less ways to make it. If you are not careful, you may end up living from pay check to pay check or worse, in debt! Saving is an essential part of managing personal finances that most people often fail at leading to financial strain in case of emergencies. The following are some of the ways you can improve your personal finances and save more:

Where are you financially

Start by knowing your financial status today. Financial status consists of a couple of factors:

  • How much you owe
  • How much you spend
  • How much you earn
  • How much you have in savings

You may need about a month to capture all the above information. Make sure you get all the credit card payments, bills, purchases and loans in order to determine where you are financially. Once you have a clear picture of your money, you can start making the decisions that will improve your financial status.

Determine your financial goals

It is quite difficult to have a plan if you do not have an end result in mind. You need to determine your monetary goals and develop a plan to meet these goals. Do you want to buy a new house? A new car? Start a business? You need to save up for short term or long term goals. Therefore, list down your needs in terms of urgency in order to avoid financially stressing yourself, buying expensive things that you do not presently need. Add up the costs of everything you need and this becomes your target savings for both long term and short-term needs. This is capital expenditures projection.

Cut back

Once you already know what you need, you should go back to your recorded spending and cut back on all unnecessary things. Unnecessary expenditures include things like magazine subscriptions that you never even read and cable TV that you never watch. Every dollar you cut back on is a dollar towards your goals. Websites like leasequit.com help you terminate your car lease early hence saving you money.

Once you are through cutting back, create a new monthly budget with only necessary expenditures and savings.

Jump start your savings

By now you are itching to start saving. Relax; you have already covered about 50% of the savings. Saving involves a lot of discipline and you might need to start avoiding hanging out with those friends that you often spend a lot of money with just to get your savings going. Here are some tips to jumpstart saving:

  • Open a saving account and set up an automatic savings transfer on a monthly basis.
  • You can also use direct deposit to move money from your salary straight to your savings.
  • Use your workplace’s 401(k) plan. 401(k) is a profit sharing plan offered by employers for employees.
  • Join a retirement benefits scheme.

Young woman covering her face with a 50 Euro note

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Managing Your finances With Technology

Checking your bank account on pay day can be one of the most satisfying feelings of the month, but unfortunately that feeling is often short lived. Once you’ve paid your rent or mortgage, your energy bills and your taxes, you can often be left with very little to spend on anything other than food. But although your smartphone now adds another big bill to your monthly outgoings, it can actually help you keep track of your finances and even save money. Here are a few ways technology can make managing your finances much easier.

Pay the Best Price for Products and Services

One of the best ways to make your money go further is to make sure you’re paying the best price for products and services. Often if you’re buying something from a store in person you could be paying a lot more for it than if you were buying it online. You can now even get apps on your phone like Barcode Scanner that will let you find out whether a product is available cheaper online by just taking a photo of the bar-code. If you can find it online cheaper, you could save even more money by visiting sites like Coupon Follow and Deals Plus to find discount codes that can get you a percentage off the price or even free delivery.

Check Regularly for Promotions

By taking the time to shop around and checking sites regularly for promotions you can really save a lot of money. When you do buy from your favorite stores, booking sites or even casinos take the time to sign up for their newsletter as they will let you know when they’re running sales on their range of clothes, electrical products or DVDs. If you’re a fan of playing casino games, there are even some really lucrative casino promotions to take advantage of on the internet. Casino affiliate site Red8’s regularly run casino promotions on their client’s behalf, ensuring that customers get to enjoy the latest bonuses.

 

Check Energy Savings Opportunities

You can even save money on your energy bills by checking whether you’re on the best tariff from the comfort of your mobile phone. Sites like Choose Energy will compare all of the energy providers in your state and based on your energy usage tell you what the cheapest deal for you is. Although switching energy providers might sound difficult, the website takes the stress out of switching for you and within a few clicks you can be saving hundreds of dollars every year.

View your Bank Account Regularly

Although discount codes, casino promotions and comparison sites can save you a lot of money, the best way of managing your finances is probably to keep an eye on your bank account. Luckily most major banks now have smartphone apps that mean you can check how much money you’ve got 24 hours a day, wherever you are. So whether you want to make sure you have some money saved up for something special or just want to stay out of your overdraft, these banking apps can be a real stress reliever.

              Keep a Sharp Eye on Your Finances With Your Smart Phone