You may be paying attention to the revenue coming in and the invoices that need to be paid out. However, especially for small business and start-up businesses, there is a lot of cash flow that does not get properly recorded. Your business finances should be kept in careful records. This makes it easy for you to not only see where the money is coming from, and going to. Most important, this will also make tax time much less stressful. Small businesses should utilize these simple accounting tips that will keep their business finances in order and up to date very efficiently.
Accounting Tips For Small Businesses:
1.) It’s common for many small business people to have their personal expenses blended with their business expenses, but these two should always be kept separated. Set up specific accounts just for your business from bank accounts to credit cards. This will save you a lot of time and stress during tax season guaranteed.
2.) Get all your expenses carefully organized. Paying with a business credit card for most purchases will make tracking your expenses easier and will cut back on the paper receipts you need to file. If you do need to use cash for any purchase be sure to get the receipts and file them digitally. This way you keep everything organized and in one location.
3.) Revenue is also one area you want to carefully organize. Make sure you know where all your cash coming into your business is coming from and keep accurate records. Not doing so could cause you to pay more in income taxes than necessary.
4.) You should have a dedicated day each week for updating your books. Keeping accurate and updated books is the best way to stay organized and on top of your business finances.
5.) Keep accurate records of your merchandise as well. You want to keep track of when you restocked, how much merchandise you have on hand. And how much you sold. This can easily reveal where merchandise may be misplaced, lost or even stolen.
6.) Make sure you follow-up on invoices and accounts receivable. With the many other aspects you have to focus on in your business it can be easy to forget or let go some unpaid invoices for long periods of time, but these can cost you in time and money. Make sure you send reminders or call about payments still owed to you.
7.) Small business should always hire a professional accountant to help with their financial organization. The accounting area of your business can be a complicated area to understand and you want to make sure you are not missing information. And that you are calculating the right taxes. An accountant can easily show you where you can benefit from tax deductions, keep your records up to date and help you understand your businesses finances better.
