Small Business Bookkeeping & Accounting 101
As a small business owner, you don’t have a set job description. You do whatever needs to be done to maintain and grow your business. Accounting and keeping track of your finances is big part of running a successful and profitable business. The following four tips will help you master your business’s finances, even if accounting and bookkeeping aren’t yourfavorite business activities.
1. Keep Your Finances Separate
Having separate books and accounts for your personal and business finances is must for your small business. When you’re just starting your business, it can be very easy to be lax about keeping your business and personal spending separate. However, as your business grows, this can easily turn into a disaster when you’re trying to establish a budget and track expenses, especially during tax time. So make it a priority right from the beginning to manage and track all of your business and personal accounting separately.
2. Keep Track of Everything
You need to keep track of everything related to your business. All receipts, statements, invoices and any other paperwork related to your company needs to be saved and organized. As a small business owner, it is very easy to fall behind on keeping your records up to date and tracking all of your financial transactions. However, you have to make organizing your finances a regular habit.
Keeping well-organized financial records is important to understanding how well your business is doing and making filing your taxes as smooth and painless as possible. Whether you’re doing your taxes yourself or using an accountant, dedicate time to consistently check your books to see where your business stands and ensure there are no mistakes that could turn into major problems down the road.
3. Find the Right Software Solution
If you’re going to personally handle your finances, then finding the right accounting software is a must. There is a plethora of services available to handle all aspects of a small business’s finances, from taxes to payroll management. To help guide your decision, start off by deciding which tools you absolutely to run your business. Once you know what you need, find the software package that aligns with those needs at the best price.
Don’t come down with bells and whistles syndrome when making a decision about which software solution will be best for your business. Yes, the expensive software package with every service you could dream of is tempting to buy, but it will ultimately end of being a waste of money. Small businesses don’t typically need enterprise-level software to handle their accounting needs, and you won’t use most of those services, anyway. Stick to purchasing the software solution that covers your needs, at a price you can afford.
4. Don’t Be Afraid to Outsource
As a small business owner, you already wear many hats and likely spend much of your time doing things that aren’t directly related to growing your business. Particularly in the early days of a business, it can be tempting to try to do as many tasks as you can to save money. As time goes on, however, that can become more of a burden and actually loses you company money, because you don’t have time to focus on growing your business. Hiring an accountant or bookkeeper will allow you to free up time to do the tasks in your business that you are best suited to accomplish. As mentioned above, meet with them regularly to keep track of how your business is doing financially and to make sure no mistakes are being made.
Being a small business owner can be tough, thanks to all the tasks that need to be done and the often limited budget with which to do them. Staying on top of your finances will go a long way in keeping your business solvent and successful now and into the future.