Ignition Video Series: Raj Thakkar on How to Organize Your Business Finances

Ignition Video Series: Raj Thakkar on How to Organize Your Business Finances

This week on Ignition, Raj Thakkar, CEO and founder of FOREsight Financial Services for Good shares everything business owners need to know about organizing your business finances.

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Question of the Week: I run a popular local restaurant. We have two locations and could do a third but before I go down that road I want to make sure our finances are in order. We're turning a modest profit at both locations. I look over our finances but don't really understand them, my friends nephew handles them. But, how do I know that we're doing the right things with our money? How do I ensure that my business stays financially responsible?

To watch this weeks episode of Ignition click here, or simply watch below.

 

Here are three key points that Raj shares for businesses to organize their finances:

Internal Controls

Every business should have internal controls set up with checks and balances to reduce the risk of fraud.  To do this, there should  be multiple people handling different areas of your finances. This means instead of having one person in charge of ordering, purchasing, cutting bills and reconciling bank affiliations, there should be multiple employees responsible for handling these duties. This will help improve the accuracy of your finances and reduce the risk of temptation for any employees to take some of your money for themselves.

Create a Budget

By creating a budget for the year, you can make monthly assessments against your yearly budget to see how your business is performing throughout the year. This will also allow you to see where your profits or losses are going at the end of the year.  This is important for businesses to know so that they can track the progress and status of their business and whether they are able to expand by opening a new location or hiring more staff, or whether they need to cut back.

Tax Liabilities

Every business should try to mitigate their tax liabilities by hiring a CPA or auditor.  By working with a professional, businesses can avoid being hit with a large bill to the IRS and find alternatives strategies to reduce their tax liabilities.

If you need additional assistance with organizing your finances, watch the video to learn what to look for in a finance professional and different programs that you can attend to learn how to better manage your finances.