Most small business owners are eager to jump straight into their business. The problem with doing this is you miss the other little details you need to take care of. Accounting is one of those things.
Reports show that 60 percent of small business owners feel like they aren’t knowledgeable about accounting and finances. If you want to be successful in business, you need to get your small business accounting right.
Follow the small business accounting tips below to make sure your books are correct.
1. Separate Your Personal and Business Accounts
Your business finance records need to be accurate when you tally up your totals during the year. If you have personal expenses mixed in with business ones, making sure you have correct records becomes hard.
Set up a business bank account and handle all transactions through that account. Doing this makes recordkeeping quicker and easier.
2. Monitor Your Invoices
You need to know how much money your business is expected to make during the month. Unfortunately, you can’t always depend on customers paying their invoices on time. This can cause problems if you don’t stay on top of things.
One of the best accounting tips is to keep a list of all unpaid invoices. Make this list prominent, so you have an overview of what customers you need to follow up with. People need to know that you expect to be paid on time, so stay on top of every payment that’s overdue.
3. Pay Your Quarterly Taxes
Taxes work a bit differently with businesses. You don’t pay what you owe on tax day like regular workers. Companies are expected to estimate and pay taxes every quarter during the year.
Missing your quarterly tax deadlines will leave you with tax penalties. Mark these dates down, so you don’t pay more taxes than you need to.
4. Automate Everything You Can
Data entry is one of the most time-consuming and error-prone parts of accounting. One mistake with your numbers can give you a picture that’s vastly different from reality. If you want to avoid these mistakes, automate as much data entry work as you can.
One of the best accounting tips for small businesses you can follow is to automate the data entry process with online accounting software. Your software will log into your bank account and download every transaction. Once your data is downloaded, you’ll be able to view detailed reports that show you everything you need to know about your business finances.
5. Work With an Accounting Expert
You can handle a lot on your own as a small business owner. Your finances likely aren’t that complicated yet. It isn’t necessary to hire someone full time when this is the case.
Unfortunately, that doesn’t mean there won’t be problems with your records. Get in touch with an accounting expert who will give your finances a second look. Make sure to learn more about everything an accounting freelancer or firm can do to supplement your accounting efforts.
Follow These Small Business Accounting Tips for Success
Accounting for business is something that you need a foolproof plan for. Make sure to follow the small business accounting tips above when putting together a strategy for handling your books. The more you do to make sure your finances are accurate, the better business decisions you can make.
Do you want to read more tips that will help you run your small business? Head back to our blog to learn more.