If there’s one thing you can overlook in your business, it’s accounting. It’s not as sexy as marketing and it’s not as fun as closing sales.
Yet, you can’t afford to overlook accounting. Businesses are already facing an uphill climb to survive, and the vast majority go out of business because of cash flow issues.
You don’t want your business to be one of them. How can you stay on top of accounting and make sure your business is profitable?
Read on to learn the top small business accounting tips to help you get a handle on your financials.
1. Set Up Systems
Organized bookkeeping comes from having good systems in place. Start with how you’ll keep track of your expenses. There are a lot of accounting tools out there that will help you with that.
You’ll need to create a system for when you handle accounting tasks. Depending on the volume of transactions, you may need to do it once or twice a week. Set up time in your schedule and stick to it.
2. Keep Records of Everything
When it’s time to do taxes, you want to be able to write-off your business expenses to lower your tax liability. You need to make sure that you have records and receipts of those expenses.
You’ll need to produce them if you’re ever audited by the IRS. Unfortunately, bank statements won’t serve as proof.
It’s best to have a filing system for your receipts. Some small business accounting software suites have the ability to take pictures of your receipts and then attach them to the transaction.
3. Have a Business Bank Account
For sole proprietors, it’s easy to have your business and personal account as one and the same. You don’t want to do that for a lot of reasons.
Keep your business and personal accounts separate. It’s more professional and easier to track business expenses.
4. Make Payroll Easy
Small business owners spend a lot of time on payroll. It can be hard to manage and keep accurate records, especially if you use direct deposit and spreadsheets to pay employees.
You can implement a tool like this one from paystubcreator.net that lets you create detailed pay stubs for your employees. It helps you keep accurate records on file and your employees have proof of payment.
5. Outsource Bookkeeping and Accounting
You’re probably not an expert in tax law, especially since they seem to change all the time. If you have a hard time figuring out taxes, accounting, and basic bookkeeping, your best bet is to hand that off to someone else.
You can hire a part-time bookkeeper or outsource those services. Your time is valuable and you could be losing opportunities because you’re spending so much time on the financials.
Small Business Accounting Made Easy
Small business accounting is one of the most important things you can do for your business. It lets you know how healthy your business is at any time.
You want to make sure that you have a good handle on accounting to avoid any unpleasant financial surprises. That starts by setting up good systems and keeping records of everything. If you’re not sure about accounting, outsource it to experts.
Want more financial tips? Check the Money and Economy section of this site for the latest economic news that impacts your small business.