How to keep track of your company’s finances

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By Samantha Higgins

Are you a small business owner? One of your biggest priorities will be to keep track of your finances. You can do this in several ways. The best choice will be to use modern technology to assist you. The idea here is to keep an eye on every debit and credit you rack up during the year.

Use management software to process your loans

Are you involved in the business of processing loans? Your best bet will be to make use of the best loan management software on the market. This is software that will enable you to quickly process your loans and keep track of them. Depending on the program you get, you can also receive full tech support. This will help you grow your business.

Open a business bank account

As a new business owner, the first thing you should do is open a business bank account. Once you have it up and running, you shouldn’t use it for anything else but business. Your personal and professional bank accounts need to be kept separate. It will help you stay solvent if your business should fail.

Sign up for an online accounting system

The next thing you will need to do is make sure your accounting is taken care of. Your best bet will be to sign up for an online system. There are plenty of accounting software systems that you can make use of. Google, Microsoft, and many others are well known for their quality. You can also use spreadsheets.

Your main goal should be to use the software to keep full track of outgoing expenses as well as incoming payments. Doing so will allow you to record each event as it occurs. Real time accounting will help you keep your balance up to date. Using software will cut down on the time you need to invest in this task.

Choose a cash or accrual accounting system

Once you have your software program in place, you have a new choice to make. At this stage, you will need to decide whether to go with cash or accrual accounting. Both types have various pros to recommend them. They also have several downsides. You should choose one or the other according to your needs.

Are you a sole proprietor or the owner of a very small business? In this case, you will probably be fine with cash accounting. All you need to do is record each transaction as it takes place. This includes all of the expenses your payout as well as the payments you receive. While simple, it can be time-intensive.

Accrual accounting is a much more complex operation. This will be the system best fitted for a growing business. In this type of accounting, you record income only when a product is sold. You won’t make any kind of notation when you receive payment for the product. Only the sale itself is considered relevant.

This principle can be applied even further under the rules of accrual accounting. Your expenses will be recorded at the moment that you receive the bill. No further notation is made at the time that you pay it. The point of this method is to let you focus on expenses. This will help you keep them down.

Use software to connect your financial institutions

How easy is it for you to track each of your expenses? The best way to do so will be to link up all your financial institutions. You can do so with the help of software.

Doing so will streamline your expense tracking. You can connect your bank to the software to witness each transaction in real-time. You can do the same with all of your various other institutions.

It’s time to get your finances in order

There are many ways that you can use to keep track of your finances. In the end, the method you choose will depend on your type of business. The size of your business will also be a factor. It will be up to you to make the choice that is right for your professional needs. These are only a few of your many options.


Samantha Higgins is a professional writer with a passion for research, observation, and innovation. She is nurturing a growing family of twin boys in Portland, Oregon, with his husband She loves kayaking and reading creative non-fiction.

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