When you decided to start your own company, you likely focused on the products or services you were selling, along with your amazing customer service and marketing skills. While running your own small business offers plenty of upsides, it also means you’re responsible for every aspect of operations, including the parts you think are beyond your capabilities – or just plain boring. Accounting tasks often fall into both of these categories, but that doesn’t keep attending to them from being absolutely necessary. The good news is that you don’t need an accounting degree – or even to be good at math - to do what needs to be done. The five tips that follow are simple to do. Incorporating them into your everyday tasks and mindset will not only cover the basics – but will also give you a much clearer sense of your business’s financial health.
Avoid mixing business expenses with personal expenses. It may feel simpler to reach for the same credit card or use the same bank account to pay for everything, but from a business accounting perspective it’s a recipe for disaster. Whether you are a sole proprietor or are an LLC (where separating these expenses out is a requirement), you’ll find that if you pay for your business expenses separately it will make it much easier to optimize your taxes and to make smarter decisions based on a good understanding of your revenues and cash flow.
Use cloud-based accounting software. Where it was common for small businesses to invest in off-the-shelf accounting software, cloud-based software has made it much easier to access your information from anywhere. It also offers the advantage of continuous software updates that are responsive to both improved performance and legislative changes, as well as superior security.
Log expenses and payments every single day. Procrastination is something we’re all guilty of, especially when it comes to tasks we’d rather not do, but keeping current on logging expenses and revenue is crucial. Make it part of your daily activities, like making yourself a cup of coffee or brushing your teeth. Otherwise, you’re going to have a big pile of records that either has to be entered into your books or get forgotten about completely. The good news is that there are plenty of apps that make the task easier.
Put a quarterly (or monthly) check-up on your calendar. Every quarter you need to take a close look at how your business is doing, so put it on your calendar as if it is an important appointment. If you’ve kept your records up to date, this will provide you with the opportunity to get a helpful overview of how your business is doing and what trends you can track and respond to.
If you can’t handle your accounting tasks, get help. We offer bookkeeping and accounting services to help you stay on track. Though you may be able to manage on your own for a while, business growth may necessitate hiring help. Whether that is a part-time or full-time employee or an outside service like ours is up to you. Just make sure that you recognize when you’re in over your head or out of the time you need to do it yourself.
Keep your business headed in the right direction with the critical financial data you need to make smart decisions. Contact us to discuss how we can help your entity prosper.