Business owners have so many urgent matters to attend to that they may relegate bookkeeping to secondary status. However, efficient business accounting is essential, and it is important that you keep up with it if you want your business to grow. Here are some tips to help you accomplish this.
Keep Personal and Business Finances Separate
Mixing personal and company finances can not only cause confusion, but it can also create problems at tax time. Instead, keep your business finances completely separate from your personal finances. One way to accomplish this is to have a bank account and credit card solely for your business. Keep strict records of any personal assets that you invest in your company, and avoid deducting personal expenses on your business tax returns.
Maintain Meticulous Financial Records
Regularly update your business financial records. This includes tracking all expenses, especially the details of labor costs such as salaries, overtime, benefits, and perks. Record all your income, including sales revenue, loans, and payments from other sources. Additionally, keep accurate records of your inventory so that you know how many of these assets you have on hand at all times.
To minimize late payments, send out invoices as soon as goods are delivered or jobs have been completed. Remind your clients as deadlines approach. Consider offering discounts if they pay early, and make it easy on them by offering as many payment methods as possible.
Get Some Help
Whether you handle the business accounting yourself or delegate it to a trusted employee, be sure to obtain cutting-edge software to assist you. Even if you mainly prefer a do-it-yourself approach, it is worthwhile to periodically hire a professional accountant to keep your records straight and help you out at tax time.
Use Financial Forecasting
Creating financial projections that offer you estimations of the state of your company finances in the future helps you anticipate difficulties and find the best path to company growth. You can also foresee upcoming major expenses and prepare for them.
For more advice on small business accounting, contact 360 Commercial Capital.