Running your own business is no small feat, even if you class yourself as a relatively small start-up. Running a business takes time, it takes effort, it costs money, and it takes a whole heap of commitment in the process.
No matter which services and/or products you provide, you will always have competition in some form or another, which is why you simply cannot afford to cut corners, no matter what. Take bookkeeping and accounting for example.
A lot of small businesses tend to overlook the importance of keeping their financial affairs in order, and consequently, they end up paying the price further down the line. The good news is that thanks to accounting software, as well as accounting experts, a solution for your accounting woes is never far away.
If you thought that accounting was simply a matter of keeping invoices, receipts, and proof of earnings, in an old drawer or filing cabinet, you are very sadly mistaken. To help you get a handle on your accounts we’ve compiled this list looking at 5 of the top accounting tips for small businesses, ranging from everything from accounting software, to simply opting to go paperless. So take a look at the following, and see what you can do to help keep your accounts in order.
Separate your finances – In the small business world, one of the most common mistakes that professional accountants come across on a regular basis, is when business owners fail to keep their personal and professional finances separate.
These business owners basically use the same bank account for personal use, and business use, and needless to say, things quickly get very confusing. When you use just the one account, this makes it so, so much harder to separate business expenses from personal expenses. Potentially this means that you could miss out on claiming back expenses which were tax deductible.
Not only that, but when you take money from the same account as your business, you are basically taking money from your business, and who knows when you might need it again? To make life easier, make sure you have at least two bank accounts – one for personal use, and one for your business.
Switch to paperless – By going paperless, not only are you helping the environment, you are also helping your business, and subsequently, yourself in the process. You see, many small businesses often print out receipts and invoices, and mail them to clients, which is not cheap.
Not only are you paying for paper, stamps, printer ink, and postage, you are also wasting time in the process. When you embrace modern technology by going paperless, you will quickly find that it is not scary, and in actual fact, it is much easier for you and your company as a whole.
And not just that but by keeping records online, you can easily refer back to a certain date and time if you are unsure about something. Keeping records on paper is risky because paper gets lost easier, plus it could end up in the trash by accident. With online bookkeeping, however, this isn’t a concern, providing, of course, you perform regular backups.
Embrace modern technology – Expanding on what we’ve just spoken about in regards to modern technology, if you embrace it, rather than fear it, your business as a whole will benefit hugely. You see, by using technology, such as accounting software, you have specialist software which is designed primarily to help businesses keep their books and accounts in order.
Then of course, there is cloud technology which ensures that you can backup your data, keeps it safe, and access it from virtually anywhere, on any device. You can also actually save money on backups and servers, which is certainly not something to be sniffed at.
By using accounting software, and modern technology in general, keeping your accounts and finances in order is easier than ever, plus it helps reduce the risks of human error, whilst simultaneously saving time.
Whilst there are many different forms of accounting software to choose from, you will find that generally, most of them will allow you to automate any recurring transactions and payments, whilst importing invoices and bank statements.
Take the time to find a good accountant – Another very, very common mistake that small business owners make on regular basis, is trying to handle the accounts themselves. They worry that bringing in an accountant may wreck their systems, or make life harder than it needs to be, when in reality if you choose the right accountant, the exact opposite will be true.
Professional accounting companies and bookkeepers work with small businesses like yours for a living, and many of them know exactly what they are doing. Whilst these accounting services don’t come for free, they are certainly well worth investing in, and as the saying goes ‘you have to spend money to make money’.
When searching for an accountant, take the time to read reviews, look at their experience, and follow your own gut feelings and instincts. Some business accounting companies will indeed be better than others, so try to find the best one that you can, and don’t be afraid to speak to multiple companies before you begin narrowing down your search.
Don’t overcomplicate things – One reason why accounting software in small businesses is so popular is that it helps simplify business accounts. The simpler things are the more efficient the business becomes, and the more time you will save.
When keeping records of your books and your accounts, don’t try to get too technical, otherwise, you run the risk of overcomplicating things. Whether you use spreadsheets, databases, or anything else, make sure things are simple, concise, and easy to understand.
For example, you may wish to have column or book dedicated solely to your earnings, another one for your expenses, another one for debts, and so on. Everything should be clear, simple, and straight-to-the-point.
By doing this, you know exactly what you’re making, exactly what you’re spending, how much you need, what’s coming in, what’s going out, and more. Nothing will be left to chance, and if done correctly, there shouldn’t be any uncertainty in regards to your business accounts and finances.
Whenever in doubt, just stick to these tips and you’ll be good to go in no time!