Hardwood Floors August/September 2025

FINANCE BUSINESS BEST PRACTICES

Keeping Your Small Business Finances Organized THE POWER OF ORDER:

Organizing your business’s finances isn’t just about staying out of trouble – it’s about gaining clarity, control, and confidence. First, we will look at practical steps to help you organize your finances. Then, we will explore the benefits you’ll enjoy once you do. While the idea of getting organized can be overwhelming, you don’t need an accounting background to get started. Here are some basic steps any small-business owner can take: SEPARATE PERSONAL AND BUSINESS FINANCES This is rule No. 1. Open a dedicated business checking account and, if needed, a business credit card. Mixing personal and business expenses creates accounting confusion, limits tax deductions, and could put your personal assets at risk in the event of legal issues. CHOOSE THE RIGHT ACCOUNTING METHOD Most small businesses use either cash-basis accounting (recording income and expenses when cash is received or paid) or accrual-basis accounting (recording income and expenses when they are earned or incurred). Cash-basis is simpler and often sufficient for small operations, but accrual offers a more-accurate picture of long-term performance. Consult a tax professional to choose the right method. 1

In the fast-paced world of small-business ownership, financial organization is often the first thing to fall by the wayside. Between managing customers, employees, inventory, and marketing, it’s easy to let receipts pile up and spreadsheets become outdated. While disorganization might seem harmless in the short term, it quietly can sabotage your growth, cash flow, and even your legal standing.

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