You’ve read the title, but before we begin, let’s talk a bit about financial acts. Namely, what are they? To avoid any arguments, ‘financial acts’ refers to anything you do that will affect the financial side of your business. If we get a bit specific it’s aligned with managing your business finances. Things will become clear as you walk your way through this piece and see the different acts listed down below.
For now, all you need to know is that these financial acts should be carried out by every business:
Every purchase or sale needs to be tracked and cataloged. In the old days, this was done by writing the transactions on a piece of paper. If you want to do this, by all means, do it. However, it is strongly recommended that you have some sort of digital system in place as well. Most companies will use software that lets them track all the comings and outgoings on a single spreadsheet.
The purpose of this is that it helps you see where your money is going and coming from. You can see the sales figures for certain weeks/months, and you can see how many things your business buys. Not only is this essential for tax purposes, but it also helps you identify some negative or positive habits. For instance, you may see you have far too many outgoings and they should be reduced.
On the topic of transactions, you should always collect receipts when buying anything. This is proof that you have purchased a specific item, and you may need it as evidence in various scenarios. You can literally get receipts in any industry for any purchase. Even in the construction world, you’ll find trucking scale e-tickets that basically function as receipts by showing you the precise weight of the materials you purchase. No matter what business you run, you should always ask for a receipt following a transaction.
Receipts help you file your tax returns, but they also come in handy when disputes come in. Let’s say you buy a brand new computer for the office, but the wrong one arrives. When you contact the company to complain, you’ll need a receipt as proof that you actually purchased the product. Then, they can send out a replacement with no problems.
Setting up direct debits
In reality, your business will have various bills that must be paid every month. This could include office rent, utilities, etc. It makes sense to set up direct debits that automatically pay your bills on the right date. This is the simplest financial act as you don’t have to do anything after the direct debits are set up. Now, you never have to worry about missing bill payments and being hit with extra fees/charges!
After reading through this article, things should be a lot clearer for you! These three financial acts are crucial as they help you manage your money. You will get your accounts in order, be well set-up for tax collections, and you won’t miss any bill payments.