Having rules that apply to your business finances will run far to prevent damaged partnerships and failed businesses.
If you are in a business together with your partner or partner, this area must be discussed clearly, defined and agreed upon by both of you, regardless of how shares or ownership of business are divided.
Strict and professional accounting procedures with company guidelines must always be in its place along with checks and balances to ensure accuracy and honesty are maintained.
There must be a company guideline about:
1. Priority Expenditure – Determine what field you will have priority expenditures as baseline eg. Advertising may be important for the survival of your business, so there must always be enough funds for this,
2. Agreement on the level of risk – this includes things such as bulk orders, new products, company investment funds, using additional staff etc.
3. Who signed the check, withdrawing, paying bills, spending small money,
4. What level of expenditure can be made without a joint agreement,
5. What assets will be purchased and how you decide e.g. Purchase new company vehicle
6. The level and increase in personal salary and staff, what procedures will be applied to monitor this,
7. What expenditure will be paid personally and what can be paid by the company,
8. How much can be spent on business entertainment and where (eg is a strip club, casino, and expensive restaurant that is acceptable),
9. What dividends will be paid when, how and when will you decide on a salary or image ‘salary increase’?
10. Giving levels for charity or sponsors etc.,
11. And who will have the final say, or what is the next step if you cannot reach an agreement.
12. Keep your business and personal finance completely separate. Don’t pay your household fees from your business account. Pay yourself a salary or number of images set regularly to cover your personal, family and household costs.
13. This is a difficult, because we always assume that our marriage / relationship will last a long time. But if your business is substantial and complicated, and if there is another complicated trust or legal structure involved, it may need to be done in agreements and procedures regarding business there must be interference in relationships.
Look for your accountants’ advice and lawyers if you need to. It is important that these areas do not become a field of dispute which can ultimately destroy businesses and relationships.