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5 Money Management Habits Every Business Should Start Right Now

Have you ever heard of a business that made millions of dollars, then suddenly went broke or bankrupt? Majority of the time that is because of mismanagement of money. This exemplifies that it does not matter how much you make if you can not manage it properly. Money management refers to the processes of budgeting, saving, investing, spending, or otherwise overseeing the capital usage of an individual or business.

As a virtual bookkeeper, a pain point for my clients is that before they hired me, they had no idea what was going on with their cash flow. Money mismanagement in business can be dangerous because the owner can risk overspending, underestimating income, or mishandling funds. Unfortunately, this typically leads to a lack of cash flow, late bills, and layoffs.

The only way to avoid closing your doors is to find tangible ways to manage the money coming and going. Below are the five money management strategies that keep you and your business boujee. If you are a business owner and you need help managing your finanical transactions click to schedule a consultation with a certified bookkeeper.

  1. Do your bookkeeping weekly.

  • Doing your bookkeeping weekly means logging and categorizing all your financial transactions in your business.

2. Review your numbers and financial reports monthly.

  • This habit is all about running a profit and loss report every month.

3. Save for taxes monthly.

  • To save for taxes, transfer 30% of your monthly income net income (not your gross) to your tax saving account every month.

4. Pay yourself every month.

  • Instead of pulling money out of your business whenever you need it, pay yourself a set amount once or twice a month.

5. Clean up your spending every year.

  • At the end of year-end, you should perform an in-depth spending audit.

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