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Managing The Financial Aspect Of Your Home
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Published on this site: December 3rd, 2007- See more articles from this month
Financial management is one of the pitfalls for people who are
engaged in a home business. Even if your have choose a good home
business but you have no idea on how to manage your business
financially, you will most likely end up losing a lot of money.
Since you cannot afford to waste your money, you better shape up
and take care of your finances early on. It will not really do
you any good if you just keep working on your business not
really knowing if you are making enough money to compensate for
your efforts.
Getting started
The first thing that you need to do to get your financial
systems in place is to open a separate bank account for your
business. A lot of home business owners keep their personal
funds together with their personal accounts that they end up
drawing money which should have been for the business and vice
versa. The practice of mixing up your personal funds and the
funds for your business is very dangerous because you will not
have much control over you business and personal finances. By
opening separate bank accounts for your business and for
personal use, you will be able to manage your money better.
Aside from setting up a separate bank account for you business,
you must see to it that you also set up a separate funds for
your business expenses. Since you are working form home, try to
separate all the expenses that are related to your business from
your home expenses. For instance, your business phone should be
paid by money coming from your business account. You might also
want to "bill" you business for utilities and rent. You can do
this by setting a certain amount every month for utilities and
rent then take this amount from the business account.
Out of your business earning, you might also want to set up a
certain amount which you can draw out as your salary. The good
thing about setting a certain amount of money every month as
your salary is that you will be able to determine if you are
indeed making enough money to pay for all your business expenses
and at the same time pay yourself for your efforts. Make sure
that you only draw-out the extract amount of money from the
business for your salary. Even if your business is doing well
and you have plenty of money in the business account, do not be
tempted to draw more than you should. Keep the money in the
business account for future use. You might want to expand your
home business later on.
At the end of the year, you might want to give yourself a
bonus. If you have been religiously following your own rules
regarding your finances, you will be surprised at how much money
you will have left in your business account at the end of the
year.
Dock J. Murphy: Is owner of Plug In Profit http://Site.com and writes on a variety on a variety of
subjects. To learn more about this topic Dock J. recommends you
vist: Http://www.pluginprofitsite.com/main-17106
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