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July 18, 2018 Finance & Funding en_MY Review the importance of paying yourself even when you're the boss. Look at what can happen when you forget to pay yourself, read tips about how to budget for your own pay, and consider alternatives to paying yourself such as reinvesting money into the company and covering your personal expenses with savings. https://quickbooks.intuit.com/cas/dam/IMAGE/A0GyUKRBj/4f9c186d66480e601f84df8b513bc114.jpg https://quickbooks.intuit.com/my/r/small-business-self-employed/finance-funding/pay-yourself-first-sole-proprietor Sole Proprietors: Pay Yourself First
Finance & Funding

Sole Proprietors: Pay Yourself First

Staff Writer July 18, 2018

You wouldn’t expect your employees to work without pay, and even though you’re the boss, you shouldn’t expect yourself to do so either. When you’re a small business owner, you should always consider paying yourself first.

Before you start your business, you may want to take some time to sketch out your personal bills and financial obligations to determine how much you need to earn. Then, as you do the accounting for your business, consider subtracting your income first and adjusting as needed. For instance, if you anticipate that you won’t have enough cash flow to cover some of your business costs, you may need to find ways to reduce your business expenses. In some cases, you may even want to consider lowering your own pay.

But you don’t want to completely eliminate your pay. If you can’t survive personally, you will likely end up feeling stressed and overwhelmed, and you won’t be able to focus on the growth of your business. In addition, when paying yourself, you may want to set aside an extra 2% of your wages every week. If you think you need RM 1,000 per week, for example, you may want to pay yourself RM 1,020. Then, put that extra RM 20 into a savings account. After 50 weeks, you’ll have RM 1,000, and from a financial perspective, that should cover a week of time off. Remember, you deserve vacations just as much as your employees, and when you give yourself enough time to rest and recuperate, running your business is a lot easier.

Paying yourself can be extremely important, and you should remember to budget for your own wages. You can make paying yourself even easier by integrating GPayroll with a cloud-based accounting software, such as QuickBooks Online. But if you prefer to reinvest the money back into the company, that’s okay too. You just need to make sure you have enough savings or backup funding to cover your personal expenses until you’re ready to take money out of the company.