Business women must take control of their finances in order to control debt management. One powerful way to do this is through good budget planning and management. In fact, not understanding your business budget is a great way to find your business in a lot of trouble. Here are five quick tips to help business women see that budgeting doesn’t have to be difficult and can be a way to keep business debt under control.

#1: Be Grateful for a Balanced Business Budget: Money and budgets are two intertwined concepts. Having enough money to start your business and then being able to generate new money through your business is a reason to enjoy working within your budget. Learn to be grateful for having a business budget that is balanced. That means, you have more than enough funds to cover the expenses of your business and some left over for your profits. Stopping to give thanks for a balanced business budget is a great habit to form when learning how to make the business budget process joyful.

#2: Keep an Eye on Budget Categories: A properly prepared business budget sets out categories for different expenditures in the business. It’s important to keep an eye on the categories as you make expenditures. Which categories stay within the budget line? Which categories go over budget? Which categories need less money and perhaps have enough to shift to another category?. Keeping an eye on the categories lets you see exactly how you are spending your business money each month and will let you end the year without going into business debt.

#3: Be realistic about business income: Income in business is similar to personal income. You want to plan and use your budget so you can begin to see when you have more income and less income from business operations. This is not easy for self-employed business women, commission based sales women or business owners, because business fluctuates. It is particularly difficult in the first years of operations when you don’t know how the income will fluctuate. Try to estimate expenses high and income low the first year in order to keep the budget realistic.

#4: Make budget goals realistic. There’s more to budgeting than just writing the numbers on paper. You what to set and attain your financial goals, too. That has to do with being a business success. Before you sit down to create a budget, take a few minutes to evaluate and document the financial goals of your business. Do you want to save for more office equipment? Should you try to hire a new helper in six month? Are you thinking of moving from your home office to a physical location? What are your business goals? Without goals, a budget is nothing more than a detailed checkbook register and not a realistic working document for your business.

#5: Plan for flexibility: If your business budget and categories are so tight that you can’t afford to make one spending mistake in your daily operations, the budget will be painful to create and more painful to live by. Make financial room for a bit of flexibility in your business budget. Don’t forget to budget in for office decorations, fresh flowers, and to send a thank you card or birthday greeting to clients. This will let you enjoy doing your business each day and give you more motivation to work hard. You don’t have to put away too much for this but even $100.00 will help in the long run and give you some leeway to move around in your business operations.

If you want your budget to be something that is a debt manager for your busy, you wan to make it realistic and workable. When you design the budget process to be easier to follow, you will be able to use your budget to help keep your business out of debt in the long run.

By: Consuelo Meux

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One of the least understood of small business principles is how to keep your personal finances separate from the business’s financial figures. Keeping them separate is not about strict requirements but more about maintaining an attainable comfort level. It isn’t your comfort either you need should be concerned with. It’s the comfort level of the auditors at the IRS you should be most concerned with cause they love nothing more than clear business records.

It’s as simple as this type of thinking: If your records are clean, your audit will be easy. Separate business and personal accounts keeps the IRS carefully focused on the tax audit they were assigned to do. When you have business and personal funds in one account, those same business records are now suddenly right out in the open before an auditor who may discover problems quite to what they were looking for. Here are some ways you can keep them separate:
Your business is a hobby – There are several federal and state government policies that stipulate only businesses are allowed to deduct business expenses. Now let’s say your business is more of a hobby and not a means to make considerable money. You may have a difficult time telling the government that you are indeed running a business and not a side hobby. Many business owners compound this problem by using a personal bank account too. Tax season is a nightmare – Your accountant might hate you more for this reason because it causes quite the mess. If you are a small business owner it is important that you keep your personal finances separate from the business. This includes all types of transactions. The reason why your accountant will really dislike you is because by not separating them, you creating an awful lot of work for him to figure everything out. Limited audit paper trail – While it is recommended that you keep all your business and personal finance accounts separate, that doesn’t mean you need to keep all your records and paperwork separate. You still should, however. Everything you have on file needs to be accurate, complete, permanent and showing a clear record of income and deductions. The last thing you want is a jumbled mess that causes nothing but IRS problems for you. Keeping separate business statements and records from your personal account establishes a clear audit trail. Lack of professional attitudes – The only way people will take your business seriously is if you do too. Accept checks made out to the business and not your own personal name. This establishes a divide between you and your business. Forgotten deductions – Don’t even get me started with the disaster which will be your account statement. Doing all of your small business banking on your personal account becomes a mish mash of different transactions. You then need to spend time decipher which goes to what account. You run the risk of miss deductions you are entitled to. This kind of record keeping will cost you more in time, money, and missed deductions.

By: TL Kleban

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