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4 Accounting Tips for Small Businesses

 

Being a small business owner can be overwhelming. You have to spin so many different plates at one time and work tirelessly to keep your company going, it can be overwhelming. And while you would most likely prefer to focus on the high-priority tasks like growing the business and finding new clients, you often end up having to fight fires and spend time on boring jobs like HR and accounting.

Accounting is an area that is crucial for the longevity and success of your business. If you can’t keep accurate books, you could end up losing money, making mistakes, and inadvertently running your company into the ground. But it can be a time-consuming task. Particularly if you don’t yet have the resources to hire a dedicated bookkeeper. In the early stages, the job can often fall to the business owner to crunch the numbers, leaving very little time for the big jobs. 

To help you make the best use of your time and keep your books in good condition, here are four accounting tips for small businesses. 

Separate personal and business finances

Although it might seem easier to keep all your finances in one single account, this is not a scalable way of working. As your business grows, and your financial situation becomes more complex, it will become harder and harder to compile your tax returns and financial statements. You don’t want to have to hunt through hundreds of grocery receipts to find that one business expense. When you start your company, create a separate business bank account from the outset. This way, your business finances stay in one account, and your personal finances in the other. You will be glad you did this in the long run.

Keep your receipts

Almost everything you buy for your business will be tax-deductible, so make sure you keep all receipts. You can claim for all manner of things such as computers, stationery, office furniture, and software packages, which will add up to a significant amount. File them away neatly so you can easily find them when the time comes to complete your tax return.

Use accounting software

The biggest mistake small business owners make in the early stages is using an inadequate bookkeeping system. Although you might think that an Excel spreadsheet is the easiest way to do it, this isn’t sustainable. When your business grows and you have to deal with employee payroll and increased cash flow, it will become difficult to manage. The best investment you can make as a small business owner is an accounting software package. This will allow you to record all of your turnover, expenses, invoices, mileage, and any other relevant information. And it will be scalable to easily accommodate any business growth. 

Seek help

If you are struggling with your finances, the best course of action is to seek help before you make any costly mistakes. Speak to a professional accounting firm, such as HLB T&M Consulting, for sound advice in maintaining organized and accurate financial records.

 

 

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