Tuesday, July 9, 2013
Get In The Habit...Accounting for Small Business
Here are a few recommendations to help ensure good accounting habits so your small business will run like a fine-tuned engine.
Find a Qualified Professional:
Professional Bookkeepers and Accountants are your valued allies in running your small business. A professional bookkeeper’s knowledge of the proper data entry and accounting software will save you from costly mistakes. A qualified accountant knows current tax law and how it applies to your business. Your accountant will advise you of deductions and exemptions that are applicable to you and help ensure you’re penalty-free. Save yourself time, money & migraines-use a professional!
Make sure you’re using separate bank accounts and credit cards for your personal and business use. Sometimes it’s all too easy to use your business credit card when paying for personal expenses; make sure to record the transaction accordingly. It’s easier and more efficient to track deductible business expenses with separate accounts.
Take time each week to review your finances, use your email calendar to set a reminder. The more often you do this, the sooner it will become a habit. The more insight you have into your business’s budget; making timely well informed financial decisions will be second nature. Making timely well informed financial decisions will be second nature.
One of the largest expenses a business will have is labor. Track not only the salaries you’re paying but, payroll taxes, bonuses, car allowance and any insurance benefits your employees are receiving. In reviewing your employee’s compensation package annually, you will see that you give yourself more ways to ensure you’re not over-spending.
You would be surprised how many small businesses don’t have accounts receivable processes in place. Following up your customers when a payment is coming due is also a great way to keep an active relationship. Run a weekly accounts receivable report from your accounting software. If you see that the same customer is always late, reach out to them with a phone call to see how things are with their business. It’s tough times for everyone and extended time or a payment plan may be necessary. Communication is key in good business relationships