Financial resolutions for a new year typically entail saving resources and improving revenue. But the best moves you can make are improvements to your financial recordkeeping. This helps you prepare for contingencies and monitor your circumstances. In sunny times, routines are left undisturbed because change isn’t warranted. But implementing the highest quality standards presents a climate for advancement. Here are four habits that embody conditions favorable for financial success.
- Separate personal finances from business records. Nothing creates more confusion that tracking personal expenditures and business transactions with the same system.
- Reserve for taxes. Whether you base your effective tax rate on a projection for the current year or the actual rate from last year, set aside this percentage of your monthly income for tax remittance.
- Plan for major costs. Replacing or adding equipment, repairing damaged or worn out equipment, adding more space or moving locations, and hiring a new worker all incur large up-front cash outlays. Know how much these steps cost and when you’re likely to confront them. Set aside a little money each month so you’ll have enough when these times arrive.
- Use one bank account and one credit card. Avoid lost receipts and overlooked business expenditures resulting from use of personal cash or credit. When the business needs more funds than are available in its bank account, move personal money to the business. Then use the company account for everything the business buys. Have a dedicated credit card for business transactions only.
The Finance Writer 