When it comes to planning and decision-making, a clear record of your business’s performance is extremely valuable. You can begin by deciding on a process for tracking performance-related details. Your budget, accounting records and planning documents can form part of this process. Although proper tracking takes some practice and dedication, the results can help you build on successes and address areas where performance could be better.
Keeping records of your budget
The two most important elements of budget management are:
- Separating your personal budget from your business budget. Keeping your personal and business finances separate can make recordkeeping easier and may help protect your personal assets. You should also consider keeping a separate current account, credit card and budget for your business. Separating these finances will make tax time simpler, help you create business credit history as well as help you protect your personal finances and better understand your business’s financial position.
- Knowing the basics of business accounting, and, if possible given your financial situation, working with a good financial consultant or accountant. Increasing your financial knowledge and relying on the help of an expert can help you avoid mistakes and even detect fraud.