Different Ways To Manage Company Finances

Tax Id

When starting a new business, do not use your personal SSN or Social Security Number. Also known as the Federal Tax Identification, the EIN or Employee Identification Number is used to identify a business entity. Apply for an EIN with the IRS or Internal Revenue Service online if you don't have one and use that id to interface with the IRS for all your domestic business tax matters. Use your EIN for opening business bank accounts, applying for business licenses and loans and filing corporate tax returns.

Business Account

For starters, do not use your personal bank accounts to finance your business. You can initially or continuously fund your business account from your personal investment, however, you should separate your personal expenses from your business spendings. After opening up a separate business bank account with an EIN, you should apply for a business credit card. You can then relegate all your business purchases to your company expense account. Use your business account to receive revenue, fund expenditures including tax payments and draw your salary if there is a profit.

Apply for corporate credit cards that do not charge an annual fee, at least for the first year. Several banks offer credit cards with cash back or mileage points and other benefits. American Express and Capital One are two leading companies that are helpful to new businesses. If your business has to take a loan, make sure you pay on time to remain in good standing with your creditors. Research banks that offer a flexible payment plan with the lowest interest rates.

Spending

Automate as much as possible your business processes such as regular tax accountability to the IRS, monthly fixed expenditures and distribution of employee salaries. You can generate the Wage and Tax Statement also known as the w2 forms easily online. Utilize standard form templates that you can freely download online and customize for your business. These templates include legal contracts for human resources, marketing, and business operations.

Take advantage of the many free online tools to manage your business communications with clients. This includes maximizing the use of online social media such as Facebook, Instagram, Pinterest, and Twitter to create a marketing strategy for your company. If you need to have regular face-to-face communication with your online clients, consider a popular webinar environment such as Zoom which offers a free plan for the first 100 seats. For your first 2,000 contacts, you can utilize MailChimp freely to launch your email marketing campaigns.

Keep traveling expenditure to a minimum. Take public transportation and utilize a credit card that offers mileage rewards for travel and lodging. Utilize budget accommodations instead of luxury hotels. Pack your own food instead of dining out.

Technology

Utilize technology as much as possible to make life easier for the busy entrepreneur. Utilize a secure cloud-based accounting software that is accessible across multiple mobile and stationary devices. This will enable you to keep track of all your updated expenditures, taxes and income in one place without sacrificing security.

If you use PayPal as one of your payment gateways, take advantage of its merchant account plans that include secure credit card payment processing, a portable card reader for your mobile devices, trackable invoicing, shipping management, and refund processing and dispute resolution. These tools are time savers for the busy entrepreneur and provide streamlined transaction processing.

Be realistic with your company's spending and funding. Do not over budget and stick with a conservative plan during your first year of business. With experience, you will become better at managing the finances of your small business.