Amidst the incredibly long list of to-do items that naturally occur from running your own small business lies the necessary task of accounting. As tedious, annoying, or monotonous as this may be, it is critical to the success of any business that these records be managed appropriately and efficiently. Here is a quick list of 7 tips accounting tips for small businesses to help you maintain your business better.
1. Do Your Homework
Whether you are planning on starting a business of your own or already have one up and running, be sure to do your research. It’s important to understand the different tax forms, write-offs, laws or licensing requirements that apply to your business. An awareness of these policies can help protect and and stabilize your business in the long run.
2. Open an Account
Creating a separate account for your business makes it easier for you to keep track of your business’s income and simpler for you to do taxes. Start with a simple checking account and add savings accounts as is necessary. Also consider the benefits of having a business credit card to help you start developing credit.
3. Keep Track of All Expenses
It is critical to the maintenance of your accounts and the success of your business that you collect and track your expenses. This can be accomplished by gathering receipts and recording payments. Even the infrequent meal expenses or traveling costs need to be documented and handled appropriately. Failing to maintain these accounts can prevent you from being able to build a reliable financial statement or prepare trustworthy reports on your tax returns. It also becomes difficult to monitor the expenses or growth of your business.
4. Bookkeeping
Accurate bookkeeping is necessary in order to compile clear and precise reports as well as determine how your business is doing. In that light, be sure to research your bookkeeping options thoroughly to ensure optimal maintenance of your accounts.
A DIY route requires tracking all of your expenses and meticulously documenting them in a spreadsheet. Then, it must be deciphered and interpreted to produce clear data and exact reports. For many business owners, this option simply asks too much of them, as they have limited time that should be spent on moving their business forward, rather than on tedious accounting work.
Another option is to simply outsource your bookkeeping and accounting. For those that already have too much on their plate, this is a valid consideration.
5. Establish Payroll
Whether you have your own employees or independent contractors, they all have to be paid for their services. Abiding by a payroll schedule and withholding the appropriate taxes are also steps that can complicate this process. Our services can help you check this item off your list so you and your employees can move on to bigger and better things.
6. Pay Taxes
While tax season is still relatively far away, it’s important to understand the ramifications of tax expenses, deductions, and payment plans when organizing your business finances. The type of business that you have will determine the kinds of tax expenses you need to anticipate. Keeping track of various tax requirements as well as deductions that you can qualify for can be difficult. Not only that, but filing taxes can be a tedious process. Our services at Your Balance Sheet can help you accurately fulfill your tax requirements.
7. Gross Margin
The term “gross margin” simply refers to the difference between the cost of the goods you sell subtracted from the revenue that you generate from the sale of those goods. This figure is a helpful determining factor to keep your eye on as your business progresses forward in future months and years.
However, in order to keep tabs on this figure, you must have consistent and organized accounting practices working in the background. At Your Balance Sheet, we’re able to provide those services and provide you with consistent reports so that you can see a snapshot of your business at a moment’s notice. Our accounting tips for small businesses can help you manage your business better.
At Your Balance Sheet, we’re committed to doing the accounting work that you simply don’t have time to do. It’s our job to alleviate your workload and enable you to focus on your business. For more information about our services, feel free to contact us with any questions, or check out our services page.
