By Funding Gates
For small business owners, the coming of a new year is often a time of reflection. It’s important to look back at the year and think about what worked for you, but also consider the things that did not. Making the necessary changes to ensure that you have a solid 2014 can definitely take a little effort, but once you find yourself on the right track, you’ll wonder why you didn’t do these things years ago.
Here are three essential ways for small businesses to keep their finances in check in 2014, all of which can help you to rest easy knowing that you’re making the right moves.
1. Create a Cash Flow Forecast
Forecasting your cash flow for 2014 is one of the most important things that you can do in order to ensure that you don’t end up spending more than you can afford to. This is especially true for businesses that rely upon seasonal customers, as you’ve got to know in which months you’ll have to be restrictive with your spending. Creating a cash flow forecast is best done by going over your 2013 records and using this as a base to work off of. If your summer wasn’t very lucrative, for example, you may want to plan to pinch a few pennies around that time in 2014.
Cash flow forecasts are only assumptions about how things will go in the future, but they are often quite accurate.
2. Reevaluate Your Record-keeping System
If there’s one thing you do in 2014 to better keep your finances in check, it should be to reevaluate the ways in which you actually keep your records. Tracking each and every one of your expenses (as well as the cash that flows into your business) is essential, as this will not only help you to make more accurate predictions and plans for your business, but will be a major help come tax time.
These days, paper record-keeping systems are no longer used nearly as much as they had been in the past. Instead, look for a program or cloud-based software that will separate your purchases into different categories, and don’t hesitate to experiment with a few different options.
3. Pay Attention to Changes in Tax Laws
Tax laws can change on a yearly basis, and 2014 is no different. There are a few different changes that need to be considered this year, such as the fact that payroll taxes have gone back up to 6.2%. Also, the top marginal tax rate has gone up to 39.6% from 35%, which applies to those who have a taxable income of over $450,000. Not all hope is lost, however, as other changes on a federal level are hoping to make things easier for small business owners, including a bill that may ease private lending restrictions.
For best results, work with an accountant who can show you which tax changes will apply to you and your business. 2014 is going to be a great year for small business, and the sooner you get ready, the better it’ll bode for you!
This article was originally published on Funding Gates. Funding Gates is the world’s first CRM platform for receivables management. Serving as an online credit department for small businesses, Funding Gates is set on making managing receivables the easiest part of running a business.