Image credit: Picdream via Pixabay
Mess up your accounting and your business could go down the drain. It's that important, and means that there are a number of issues concerning the accounting aspect of your business that you should always look into. Below are some simple tips that you can implement in order to keep your business successful.
1. Keep Your Business Records Separate
Business is business and personal is personal. Never make the mistake of mixing up your personal records with business ones. That’s just asking for trouble.
Keep a separate business bank account and credit or debit card. Pay for your business expenses with your business funds and keep all business receipts in a separate file from all your personal ones. Keeping these records separate may seem tiresome, but it’s still necessary. You will soon realize how important it is when the time to balance the books and pay your taxes comes around.
2. Keep Track of all Your Transactions
Keep accurate records of all your business transactions for accountability purposes. If you are always busy, store every receipt, charitable contribution, and invoice in a file and then record the transactions later on.
You may want to pay for as many business expenses as possible with your credit card. You can also choose to receive payment for your business products via the bank (online banking is a good idea). Doing these things will make it much easier for you to determine where the money went or where it came from once it’s time to record your transactions.
3 Consider Outsourcing Your Bookkeeping
Image Credit: Alexas_Fotos via Pixabay
While it’s tempting to run every aspect of your business including the bookkeeping, you should consider outsourcing your accounts. An accountant or bookkeeper is much better at balancing the books, and they'll know how best to keep records of your business transactions. You will also benefit from professional advice on how to pay the minimal amount of taxes possible.
In addition, by outsourcing accounting services, you will be able to concentrate on your core business operations. In the meantime, your accountant will help you navigate the financial minefields that have caused many businesses to fail within the first five years.
4. Use Accounting Software
If you are hell-bent on not hiring an accountant to handle your business finances, you can opt for accounting software. Manual bookkeeping can be very tedious if you have to do it yourself.
There are plenty of accounting software products out there that are good for small businesses. FreshBooks and QuickBooks first come to mind. Weigh the pros and cons of each program then choose the best one for your business needs.
Ensure that the accounting software you select is compatible with other business programs that you run. Otherwise you might not be able to synchronize everything.
5. Go After the Non-Payers
A business can only survive for so long if it keeps on selling goods on credit. Without money in the bank, your business will have very little cash flow. Failure will come soon after.
Make the effort to go after clients who fail to pay for your products. Nudge them first and then go after them aggressively if they are not receptive to your hints. Determine the problem clients and ensure that you do not sell goods on credit to them again. Find other customers with a good payment records.
6. Get Organized and Set a Budget
Without a planned budget, you will exceed the funds you have available for your business operations. It’s important to be organized and to plan ahead. Take at least a few minutes every day to keep track of your business expenses. Do this for a month.
If you manage to track your business expenses for a month, you may be able to project your future expenses. You can then budget for your business and plan how you will spend your money. Your budget will also enable you to determine how much income you should generate to meet your business costs and generate satisfactory profits.
Business accounting does not need to be complicated. If you take a few minutes every day to stay on top of your business finances, you will do just fine.