Starting your own business is overwhelming to say the least. There’s always something new to learn and a mile-long to-do list that you’ll probably never finish.
Even though it can feel really intimidating, ignoring your business finances isn’t an option. If you want to avoid getting in trouble with the tax institutions / government, and possibly paying big interest or fines, you’ve got to organize your business finances
9 Steps to Organize Your Business Finances
1. Separate Your Personal and Business Finances
Most business entities, (Pty) Ltd, are required to separate their business and personal finances. If you’re a sole proprietor, it’s not required but it is a good idea to get into the habit as soon as possible.
Keeping your finances separate actually makes your life much easier when it comes to documentation and taxes. Please open a business bank account for your business.
You are able to set aside money for taxes, my paycheck, big purchases like website hosting, or anything else I want to save for in advance.
2. Create a Business Budget
Having a budget, for yourself or your business, helps you make a plan, stop overspending, and achieve your goals. After all, you started a business to make money not to spend it.
Keep a list of all your recurring expenses like software or memberships, subscriptions, you pay for each month or year. This will help you become more aware of what you’re spending to run your business. It also helps you keep track of when you’re going to be billed again in case you want to cancel or upgrade.
There are wonderful softwares that comes on handy in this regards however you could also use a spreadsheet to track your expenses.
3. Set Up Finance Software or a Spreadsheet
All of your financial transactions should be recorded in the same place. Most people use software for this like QuickBooks, FreshBooks, or Wave. You can also use a spreadsheet, especially if you are just starting out.
Get the Business Finance Tracker Google Sheet!
4. Track Your Income
Anytime you collect money from a client, affiliate program, digital sale, or other income stream you need to make sure that transaction is recorded. If you don’t have a record of it, you won’t be able to prove it for your taxes.
5. Track Your Expenses
Record every purchase as soon as possible including the date, description, amount, and expense category. Organizing your expenses by category as you go will save you time during tax season.
Some of the most common expense categories for online businesses are:
Ads + Marketing, Charity, Contractors,
Education, Gifts, Insurance, Internet,
license + Permit, Meals, Office Supplies,
Professional Fees, Software, Telephone,
Travel, utilities, Website, etc.
6. Save for and Pay Your Taxes
Set aside 20-30% of your taxable income each month in order to cover your tax payments. You may want to talk with an accountant to determine the exact amount you’ll need to pay.
Don’t forget that you may need to pay business income taxes every 6 months, payroll taxes on a monthly basis, labour and other and local or industrial governing taxes.
7. Stay Organized with Apps
Even though most financial records for online businesses will be digital, there are times when you might need to keep track of something outside of your computer. When you need to digitize something, try an app!
Apps are great for tracking things like meal receipts and mileage driven for business purposes.
8. Reconcile, Review, and Archive
At the end of each month, check your numbers. Make sure that all of your income and expenses have been recorded accurately and completely.
Review your income and expenses to see how you did for the month. Don’t beat yourself if it wasn’t what you hoped it would be. Just resolve to do better next month.
Also, take a look through your expenses. Were they worth the money you spent on them? Did you really need to spend that money? Keep this in mind as you make decisions for your business in the future.
Export files from your payment processors or other software and archive them. Check your paygate platforms or any other program you’re using for financial transactions. Update the file name to something searchable like “Google Sheet Transactions [Month Year]” and save them in a folder in Google Drive.
9. Set Up Recurring Tasks on Your Calendar
Monthly Reconciliation – During the first week of the month, you need to reconcile, review, and archive your transactions for the previous month.
Quarterly Estimated Taxes – create one task for each due date in a single year. Then set each of those 4 due dates to recur yearly.
Annual Taxes – Create 1 task to prepare your taxes in advance and one task as a reminder for the due date.
Matsobanemetja Business Consulting (Pty) Ltd is your accounting partner that you can entrust with the bookkeping function, right up to financial reporting. We helps you keep accurate records of your business finances.
Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.
We have well trained and qualified staff that manages the aspect of both business and individual taxes.
We are the fast growing accounting service-providing agency in South Africa and across the globe.
If you need a consultation with us with regards to your business, any type of business – please reach out to us by email hello@matsobanemetja.blog
Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.
You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za
“Beware of little expenses. A small leak will sink a great ship.”
– Benjamin Franklin
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Matsobanemetja Business Consulting Pty Ltd 