TIPS TO KEEP CONTROL OF THE FINANCIAL REINS

By Frances McGuckin

Keeping control of the financial reins poses a dilemma for the average small business owner. What to do first? There are nearly 60 different hats you have to wear to keep your business fully functional and operational. That's quite a wardrobe.

Learning to develop a suitable daily, weekly and monthly routine is the key to feeling and being organized. When you feel overwhelmed and don't know in which direction to turn, productivity immediately takes a nosedive, and important jobs are often rushed, overlooked, or left incomplete.

Control can boil down to some very daily basic strategies. Many small businesses are inundated with provincial and federal tax payments, along with personal tax payments. Here are some tips to help you get more organized.

• Transfer 5% of every bank deposit into a GST savings account. If you collect PST, increase the amount to 12%. These are funds in trust and shouldn't be mixed up with your daily cash flow in the first place.
• Even better, add 15% towards your personal taxes. If you don't need it all at year-end, it can be used towards an RRSP.
• Learn to write a weekly priority list and update it every day. Attend to the priorities in order of urgency.
• When accounts arrive for payment, note their payment date in your Day Timer to avoid penalties and interest . Keep them filed alphabetically in an 'accounts to be paid' file for easy reference.
• When you write a cheque, note the amount of GST, the type and net amount of the exp on the stub.
• Spend at least an hour a day doing follow-up and marketing. Send thank-you cards to new clients and people who have referred business to you.
• Keep a well-organized filing system with a folder for everything. File daily when the mail arrives and clean the files out every three months.
• Know how much a week you have to bill to meet both your business and personal monthly financial commitments. Total your sales each week to see whether you are on track or not.
• Have your books updated at least quarterly, if not monthly and ask your accountant to teach you how to read and understand financial statements.
• To help keep cash flowing, phone outstanding accounts at least weekly and where possible, offer to pick up cheques.
• Budget to consult with your accountant at least three times a year and have your books updated before year-end.. Your accountant can then assess your business and plan some tax strategies for you.