6 Tips for Making Business Accounting Painless
There are two words that can make any entrepreneur shudder with fear: business accounting. Even people skilled with business principles have difficulty with the financial aspect of running a company. Fortunately, there are ways you can make this process far more manageable.
1. Track Everything
Whether you keep physical files of documents or scan everything into a digital file, the most important thing is that you keep every receipt and financial document. Keep a record of your bank statements and keep tabs on inventory costs. You should have a system in place that allows you to locate documents easily, so when you need something, you can find it with ease.
2. Separate Business Expenses
For companies just starting out, it can be tempting for the owner to use his or her personal credit card and bank account for everything. While this seems simpler initially, it is going to create a lot of headaches when it comes time to file taxes.
3. Follow Up on Invoices
If you send invoices out to clients, make sure you follow up. Clients should be given 30 days, but if a month passes and you still have not received the funds, then you need to immediately contact the individual. Business accounting will simpler if you get the funds you need when you need them and maintain steady cash flow.
4. Look at Your Books
Part of your accounting practices should involve looking and updating your financial records often. It is recommended you update your books at least once a week. Any longer than that and you risk giving yourself some major headaches down the road.
5. Maintain Records on Inventory
You should have detailed, itemized lists of all the products you get in your inventory. This will make it less likely that something will get misplaced. These records need to include dates you purchased items, purchase prices and stock numbers.
6. Hire an Accountant
You can either hire an accountant full-time for your business or hire one when you need assistance. While this will cost you money, it is good to know when something is beyond your means. It is better to invest in expert advice than make wild guesses, especially when it comes to your taxes.
Business accounting is generally met with anxiety and trepidation. However, once you get a solid system in place, you will find that it is actually not so scary. All business owners need to start somewhere, so take initiative when it comes to solidifying your accounting practices. For more business tips, contact Wexum at 512-646-0902 today.