Could your personal finances use improvement? Most Americans would probably say yes, but they may not be sure how to address financial weaknesses at home. One surprising method might just provide the answer you're looking for: treating personal finances like a business. And a CPA (certified public accountant) can help. Here are five ways they'll make over your individual finances to create a well-oiled machine.
1. Maximize Profit. Businesses work to keep expenses low and increase income. And, like a business, you have this opportunity as well. Is your personal profit margin — the amount you earn minus the amount you spend each month — too minimal? Then a CPA can analyze both sides of the coin to identify where you might cut expenses or increase the amount you bring in.
2. Improve Record-Keeping. Most people have a hard time with personal financial organization and keeping records. But this can cause a variety of problems ranging from missed tax deductions to missed payment deadlines. Work with your accountant to create a workable organization and handling method at home and to avoid extra costs stemming from sloppy paperwork.
3. Keep Up With Competition. You face income competition all the time. This might come in the form of competition for promotions or it might be new hires and competition for better jobs outside the company. It could even be competition by technology and changing industry trends. Whatever the source, stay ahead of the competition by improving your product: you. An accountant can help you prioritize continued investment in yourself.
4. Make Goals. Long- and short-term goals are important, but they can be hard to make and keep. Just like a business must continually strategize for distant and closer goals, you should also develop strategies. For instance, if you want to buy a new home in 10 years, you may need to boost earnings, reduce debt, identify a budget, or improve your current home. Your CPA can help with these.
5. Use Leverage Wisely. Debt, or leverage as it's known in business, isn't all bad or all good. But many Americans hold too much of the bad kind and not enough of the good kind. CPAs are trained to know the difference between useful, inexpensive debt and unproductive or costly debt.
Want More Ideas?
Could this change in mindset help you master your personal finances? If so, start by meeting with a certified public accountant in your state today. Together, you can turn your finances into a money-maker no matter what your circumstances and goals.
For more information, contact a certified public accountant in your area.
Share25 March 2021
Accounting is the absolute most important element of running a business. If you mess up the bookkeeping even the slightest bit, the entire business could be in trouble. I know how costly a small bookkeeping error can be. About three years ago, I made a seemingly small mistake in the financial records for my business and the next year when I filed my taxes, things were very bad for me. What would have required a small tax payment had suddenly turned into a big tax bill and quite a headache. Since then, I have worked with an accountant and things have been better.