Do you consider yourself part of the 40% of small business owners who feel that the worst part of owning a business is bookkeeping and taxes? Keeping track of your business accounting can seem overwhelming and time-consuming, especially if you are not a numbers person. You also don’t want to draw the ire of the IRS and get audited or penalized.
But accounting is crucial to keeping your business compliant. Accurate books also help you make financial decisions that affect your company’s future.
Keep reading to learn tips for handling your business accounting better.
1. Separate Personal and Business
Even if you are the only employee or you only have a few employees, you need to keep your personal finances separate from your business finances. It is much easier to sort through the transactions when you have dedicated business bank accounts and credit cards. As your company grows, you will need to have separate finances anyway to avoid financial liability, so it is easier to start off this way from the beginning.
2. Have a Tracking System
Accurate records require receipts and documentation to create a financial trail. Whether you keep physical copies or scan them to create a digital record, have a set system to log, store, and handle the documentation. A great solution is to utilize lease compliance accounting software for better financial record keeping and tracking. Ensure that all employees who handle any aspect of the business finances follow the procedures.
3. Get Into a Routine
Don’t let your receipts and financial documents pile up for weeks or months at a time. Waiting too long to handle your accounting creates a backlog and makes the process take much longer.
It can also prevent you from spotting an issue early. By the time you get around to it, a small issue could compound into a major problem.
Schedule regular time to handle your books. Stick to that schedule, so you get into a routine and keep your books current.
4. Automate When Possible
Automating your accounting saves you time when you do it yourself. Secure, compliant accounting software can help simplify the process.
Software programs that work together can also help with automation. You can use POS software that connects to your bookkeeping software, for example. Your sales automatically go into the accounting software, saving you the step of manually entering them.
Outsourcing your accounting duties cuts your responsibilities, freeing you up to focus on your area of expertise. It is often a more cost-effective solution than hiring a full-time in-house accountant, bookkeeper, or payroll clerk.
Outsourcing also ensures all of your financial records are handled by a professional, which increases the accuracy and decreases the chances for a problem. Online accounting and bookkeeping options make it easy to get your business accounting done quickly and accurately.
6. Adapt as You Grow
As your company grows, your accounting needs change. Your early accounting processes may not work when your sales increase significantly. When you add employees, you have more payroll and tax considerations.
Evaluating your accounting processes regularly helps you make changes that keep the systems efficient. A professional accountant can also help with this evaluation and recommend changes as you grow.
Keep Your Business Accounting in Check
When you create systems and keep your business accounting on track, you keep your company in better financial standing. Evaluate your current accounting processes and find areas for improvement to ensure your books are accurate.
Visit our archives for more useful information that can help your business. Visit the Finance section to learn more about business accounting, taxes, bookkeeping, and budgeting.