I’m finding it difficult to manage my personal finances after starting my own business. My business is growing fast, but I can’t afford an accountant. What do I do?

Managing your finances is probably one of the hardest things to do as an entrepreneur running a business. This is because all the money that you have personally comes from your business and all the money that your business uses in the first few years is coming from your pocket including mortgaging your house, borrowing money, using your credit cards, etc. I think many entrepreneurs struggle with how to manage their finances and manage their business finances at the same time. I would suggest that you start by becoming clear about the help that you need. Is it helping bills? Is it to help collect money from people that owe you money? Is it running payroll for your staff or your employees? Is it making sure that you have filed your taxes on time with the government? The better you can define what problems you’re having then the easier it is to find a solution.

When you meet with the people that you think can help you, you must be able to articulate the exact help you need. An accountant can cover a lot of bases and an accountant can also do one thing well but maybe not do another thing well. If you need a bookkeeper versus maybe a tax accountant versus maybe somebody that can help you manage your cash flow a little better, those are all a little bit different. Make a list of all the things that you need help with and then contract it out to good companies that will do the one or two things well – like payroll. There are a lot of payroll companies that you can outsource your payroll to and they’ll take care of it. They’ll make it very simple for you to get the hours or the information that they require from your staff to be able to pay them. If you’re looking for someone to manage your bills and collecting from your customers, you might want to look at a part-time bookkeeper that has a portfolio of clients that they’re doing this with. You don’t necessarily need to bring someone on staff. I’m a believer that when it comes to the finance end of your business you probably do want to want to contract it out to other people that can help you because technology has made managing the financial end of your business so easy. Bringing it in-house when you’re growing and you’re trying to keep things under control can be a distraction and might not be very cost-effective. Look for other third-party services that can help you with the specific needs that you have.   

When it comes to your finances, it would be helpful probably to speak with whomever the accountant is that as filing your year-end tax returns. When they file your year-end tax returns, they can also give you some good advice on how to move money between your bank account and your business bank account. How do you record your expenses? How do you take deductions properly? How do you physically use your corporate credit card to pay for gas and how do you then reimburse yourself? Or how do you reimburse the company? Whoever does your year-end tax return for your business and your finances is the best person to give you some direction on how to manage your personal finance. I have yet to meet an entrepreneur who has nailed how to manage their finances separate from their business finances.  

Certainly, when you’re in growth mode you can’t always take a consistent income and so you’re usually taking cash out of the business when the business has it. But then how you do that has big implications for both you and your business. Chat with your accountant and see what they say about how to manage your finances and your business finances.  

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