As a small business owner and entrepreneur you have to wear many hats. From product development and sales, to hiring and customer service, there are a number of different tasks and responsibilities that keep you busy 24/7… including accounting.Unless you’re an actual accountant, the thought of bookkeeping is probably a daunting one, yet it’s a crucial part of your business and, when handled poorly, could ruin all your hard work.
It’s easy to put off tasks or processes you’re not particularly interested in starting out, but proper accounting should be a priority from the get go.Not only is a keeping accurate book crucial to your company’s financial health and success, but it will only get more complicated down the road so start early!
Though there may be a period when you’re responsible for a wide variety of roles, take time to evaluate where your skills are most needed and best used.Chances are, this isn’t the accounting department… identify what you need to do to make sure your time is spent effectively and efficiently.
There are plenty of services out there to help you keep your finances, including payments, invoices, payroll and taxes, organized and in check.Identify which tools you need for your business activities and look into different options taking into consideration your company size, growth rate and location – different services may be geared toward accounting and tax practices in different countries.
The most robust and expensive software package doesn’t necessarily mean it’s the right software for your company as many small businesses won’t need enterprise-level services. Additionally, more complicated software doesn’t do you any good if you don’t know how to fully utilize it.
If accounting isn’t your thing, you’ll want to try and hire a professional as soon as your company is to the point where its finances need extra attention and you can add someone to the payroll.
Especially if you’re just starting out, it can be easy to blur the lines between business and personal spending and income. Even if you’re not having much money coming in, don’t get into the habit of mixing up your finances. Set up clear accounts and budgets for your business.
Track anything and everything related to your business by saving receipts, using a dedicated business credit card and bank account. Not only will you need to track activity to see how much you’re profiting but also for tax purposes at the end of the year.
It’s easy to fall behind on tracking and keeping records of everything, but the more organized and consistent you are throughout the year, the better positioned you’ll be when tax time comes.
Make organizing an a regular habit, even if you do have a dedicated accountant on staff. Taking time to consistently check the books and see where things stand will ensure you don’t make mistakes or have things fall through the cracks.
Think well into the future to plan for significant expenses, such as new hardware or system upgrades. Being aware of large expenses down the road will help you better manage your finances now to comfortably spend on those purchases or make it through a rough patch.
While accounting software like GSTBLUE’s aim to be jargon free and easy to understand for everyone, getting to grips with the basics can be helpful.
You shouldn’t be spending your time figuring out your company’s payroll and processing paychecks when you could be working to move your business forward. Streamline pay day with outside tools or services.
In this high tech world, there’s no reason it should take any time to send out invoices or wait for payments.
Having a positive cash flow is essential for your business to succeed but sometimes your cash flow can get stuck when waiting for payments to come in. Shorten payment terms or automate subscription payments to help ensure you get paid quickly and on time.
Don’t think that once you close a deal you can immediately start counting the cash. Depending on your product and payment platform, you may be waiting on accounts receivable longer than you’d like. Regularly check outstanding payments to make sure all your customers’ payments are up to date.
If you do see outstanding payments that are past their due date, make sure you have a set process system in place to go and get them.
Clearly record any business deposits noting if they’re loans, funding, revenue or profits, so you’re taxed accordingly at the end of the year.
Though not entirely necessary, hiring an accountant or financial advisor that truly knows your business and industry will better set you up for success as they can be more than just a bookkeeper, but a trusted financial advisor with your business’ best interests in mind.
Don’t wait until the last minute to start figuring out your taxes. Preparing for taxes throughout the year and well before the year-end cut off will help protect you from unwanted surprises or errors.
Whether you’re hiring a part-time bookkeeper or investing in reliable accounting software, think ahead to where you want your business to be in five years – will the tools and processes you’re putting in place now be able to adapt and grow as your business does?