Updated: Sep 7, 2019
Entrepreneurship is definitely in. There are hundred of new business being formed around the country every day. However, with great rewards come great responsibilities. As a business owner, it is your responsibility to understand your businesses finances and stay in compliance.
Here's 4 financial tips you should know as a business owner:
1. File your business taxes
Federal and state laws require entrepreneurs and small businesses to file taxes for each calendar year if they gross more than $400. April 15th is the last day to file taxes for sole proprietors and single member LLCs.
2. Keep track of your business income and expenses
Not only will proper bookkeeping practices reduce your tax prep fees, but creditors, investors, and vendors may also ask for your financial statements in order to make informed decisions about your current and future operational performance.
3. Create a budget for your business
Similar to the importance of creating a budget for your personal life, business budgeting allows you to set goals and analyze its performance. In order to scale, you’ll need to manage your business finances and spend efficiently.
4. Pay yourself the right way
You shouldn’t be accounting for any payments to yourself as a business expense unless you elect to be treated as an employee of your business. In that case, you would be required to set up a system for payroll and issue yourself a paycheck. The proper way to pay yourself as an owner and not as an employee is through an equity account.