The owners of small businesses are always worried about accounting and bookkeeping. What if we tell you some really important tips and trick that will end your worries. Here is a list of the top 11 points that will save you time as well as money. After all, a penny saved is a penny earned!
Let’s have a look at those points:
- Separate business and personal expenses
The most important tip is to separate your business and personal account. By making a separate business account, it means that you must legally register your business first.
Drawing a line between both the business and personal expenses help to know what actual profit your business is making. In this way, all the expenses are recorded separately, and it helps a lot, especially while filling tax. At that time, all your bank statements indicate your business profit and expenses solely.
- Track your business expense
Categorize and label your expenses to track the cash flow to maintain a record of it. We also recommend using your credit card for business expenses. In this way, you end up with the receipts of every expense that afterward help during tax season.
When your choice is accounting, we recommend you to record every invoice digitally; this will intern help to track all expenses and income digitally.
- Keep an eye on receivables and invoices.
You must keep a watch on income and revenue; it is very important. Just like expenses, it is important to cater to your income after closing a contract. You must check that your money is being transferred to your account. You must ensure timely funds transfer from your customers.
Letting large amounts of receivables pilling up can affect your cash flow tremendously. Also, it’s better to use online accounting tools that can help you receive online payments and keep a record of them.
- Automate your bookkeeping
It is better to lessen your hassle with an online accounting tool. There are many accounting tools that provide you variety of functionality, and they are affordable too. You can create invoices, track expenses, access ready-made financial reports whenever and wherever you need them.
Now it’s your time to find accounting software that matches your business requirements.
- Prepare for tax filling.
It’s better to keep an amount for your tax from the very first day of your business operations. When you separate your business expense, almost most of your work is sorted. Tax norms are different in every country, so you must check according to yours.
Now, if you find any difficulty while tax filling, you can try Startup Business Accounting, which is a renowned company helping many startups and other businesses with their tax related issues.
- Spare time to update your books
Take some weekly and have a look at your invoices, expenses, and income. You must collect all the invoices and put them in the same place to update your book accordingly. This will also save time when the tax season is closer.
You can also use software like QuickBooks, which keeps a digital record of all your income and expenses reconciling with your credit cards and bank account.
- Keep checks on labor costs.
Salaries of employees are almost the largest expense of any business. You must also include this n your expenses and have a look at it too. For a start, we recommend not to hire more employees.
Try to cut down your costs as much as possible. In this way, you can save a handsome amount of your money and use it in a productive way.
- Unexpected expenses must be in mind.
While running a business, you must always put some extra amount aside. This is for a purpose if suddenly you get into a loss or if your machinery needs some equipment updation, then you don’t have to get worried.
At that time, you can use that amount to get out of that worst situation. Also, this would help you to never give out a bad impression during the rainy days of your business towards your employees.
- Maintain inventory record
You must be thinking, what’s the connection of inventory with the accounting? But this has a great impact on your expense. Many businesses face loss every year due to inventory mismanagement, and in turn, they have a huge loss of money too.
Like we have discussed, to add accounting software to your business routine, you can also integrate that software with an inventory management system. In this way, the loss of inventory is controlled, and also money is saved.
- Follow up on your invoices and receivables.
In many cases, you may forget to get your payment from a client, or he may forget to pay your amount. And when you come across all the costs you may find a variation in amount unless you have maintained your invoices and receivables record.
So follow up for invoices and receivables is as much important as for expenses.
- Future financial reporting
Whether your business is performing well enough still, you should make a report and some financial plan for the future. You must have a plan of at least 2 to 3 years that what will be the profit in the coming years. Along with that, you can make a report of where to invest this revenue in the future for more business growth and stability.
I hope with these points you can have a better idea of how to save your time and money while looking up small business accounting. Moreover, if you have anything to consult regarding your startup accounting, visit us here at startup business accounting.
