More than 20 percent of small businesses without accounting software struggle to survive their first year. If you’re an emerging business, it’s important to find the right software for your needs.
Are you a new business owner trying to figure out your accounting system? Here are some small business accounting tips to help you out.
Separate Business and Personal Accounts
This is the single most important step that you can take to keep yourself organized when managing a small business. If you make the mistake of using your personal account for business transactions it will quickly become a complicated mess. If you want to pay yourself, transfer funds into your personal bank account.
It’s a great idea to get a second credit card to use for your business expenses. That way it’s easier to keep track of your business expenses.
Find Software That Suits Your Style
If bookkeeping isn’t one of your strengths, hire someone to set up your books. Small business accounting tips include finding software that can be accessed through the cloud. You can find software such as Quickbooks desktop enterprise with hosting that connects to your bank and records transactions automatically.
When you can customize your entries, it will save you time. That allows you to work on the core business operations. Set aside time every week to keep your books up to date or find software that will update them daily. You’ll also want to make sure that your processes meet any necessary standards, whether that’s the GASB 96 SBITA accounting for reporting, or anything else that is relevant to your business and its operations.
File Business Taxes on Time
Get to know the tax rules for your location and type of business. Make all remittances on time and be sure to file your taxes before they are due. One of many great small business tax tips (besides the home office and mileage tax deduction) is to set reminders for certain tax dates and check the IRS calendar.
If you need help with the IRS, contact a professional tax attorney. They understand the tax laws in your state and will help you resolve your problem. Take the matter seriously in order to avoid additional penalties or criminal charges.
Understand Your Cash Flow
When you finish a job, prepare an invoice for your customer and send it right away. Record payments as you receive them so you can track the invoices that are unpaid. Follow up with a phone call to collect the money so you can pay your own bills.
Keep track of bills as you receive them and organize them in order of due date. Consider paying invoices sooner if they offer a discount for early payment. Establish a reputation for paying your bills on time to make a positive connection with your suppliers.
A rule for small business finances is to establish a good credit rating and plan for large investments. You can time your equipment purchases when you understand your cash flow. Use short-term loans instead of credit cards for large items and spread the cost over the year.
Master Small Business Accounting Steps
Now that you have some great small business accounting tips, you can implement the ones that work for your operations. Then you can focus on the more important parts of your business.
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