8 Bad Money Habits to Kick – Final 2

"David Balwin

David Balwin
CPA | Accountant | Business Advisor

Welcome to the final blog in which we look at 8 money habits business owners should make sure are NOT occurring in their business.

Funding Tax liabilities at the last moment.

All business owners are certain of two things  ….  Cashflow will  have ebbs and flows and there is always a tax liability in some shape or form.

Depending on the nature and size of the business various tax obligations and liabilities may apply.  There is company tax, goods and services tax (GST), payroll tax to name but a few.

Unfortunately, some business do not plan for these liabilities and find themselves stressed and unsure where to find the money when the taxman comes knocking.

Like all good business practices, plan the business’s tax obligations and set up a process of putting the money away on an ongoing basis so it is there when payment is due.  If need be, set up specific bank accounts for GST and long term liabilities so the money goes out of sight thereby reducing risk of spending by accident.

Saving what’s left after paying everyone else.

Debts have to be paid.  Businesses need to establish good credit profiles in order to maintain good suppliers and financial arrangements.  With cashflow in and required cashflow out not always dancing in harmony, business owners need to save along the way to ensure adequate funds when needed.  Set a percentage of income to be saved on a regular basis and don’t rely on scraps if and when there maybe some.  Also, manage the payment of bills ensuring they are paid on time but not necessarily the minute they come through the door.  Budgeting and forecasting is another tool to stay on top of cashflow and the financial health of the business.

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