Top 10 Accounting Tips for Your Small Business

on November 10, 2015

“Keep your receipts and invoices in a shoe box or unused file drawer “Sadly, this is the first advise I give start up managers who come to me with years of accounts overdue. However, keeping receipts in a shoe box or an unused file drawer is no way to run a business. Organizing your financial records throughout the year helps your business to stay focused and helps your accountant during tax time. Just like you put a lot of thought and planning into your business, buying accounting software demands the same level of attention. Before anything you first need to identify your need.

Choosing accounting software for your business means doing needs analysis, which involves understanding the tasks you need to perform, what are the absolutely necessary functions needed and who will use it. If it is a new application, you may need to schedule some quick training to make sure everyone understands how it’s used. If you’re a small business that’s a solo operation, you may even consider an online accounting system that keeps records in a remote location like a cloud server. Whichever system you choose, make sure you have the features you need. Having more bells and whistles than needed can be distracting and waste too much of your time. If it doesn’t have all that you need, check out possible add-on components that can provide proper functionality. Try out free demos. Most accounting software providers are happy to give a 30-day trial.  But please ensure you keep this 10 tips at the back of your mind when making the decision.

10 – Go paperless

If you’re still printing and mailing invoices to your clients, take a moment to add up how much you’re spending on paper, envelopes, and postage. And then how much you’re spending to send payment reminders and late notices. And then how many trees have had to die so you could run your business. Going paperless is better for everyone.

09 – Use technology

Cloud technology gives you great flexibility you will need as a start-up business. Access to information, ability to work on the go and reduce a lot of cost in servers, backups. It also helps you automate a lot of data entry saving time and reducing the likelihood for human error in your bookkeeping. Most software has the facility of importing bank statements, Automating recurring payments and transactions to help you save time and money.

08 – Find a good adviser

The first thing you will need to learn as a business owner and mother is simple: you have to ask for help.  Don’t go looking for an accountant. They are outdated. Look for a good Business Accountant who can provide you with an overall solution. See if he has experience running a business himself. Your accountant’s role should be your facilitator and not just a bookkeeper.

07 – Keep Impeccable Records

Keeping good records isn’t enough when running a small business. Your records must be impeccable. A good way to help do this is document imaging. This is not expensive as it sounds. There are plenty of free software that can help you do this. In fact, most of the accounting software has this facility. The amount of time and cost you will save in bookkeeping cannot be stressed! Also don’t forget to have your bank statements in excel. Most banks provide this in their online portal. Having this will save you data entry time and costs.

06 – Use a time clock to log employees in and out

Maintaining employee records is an important internal control and is also a statutory requirement. Overtime is expensive and accurate timekeeping can help to keep those costs down.

05 – Always Check!

If you do not use an automated accounting software program, then there is a chance you will not balance at the end of every period. Always check your data. The basis principal “garbage in garbage out”. If you’re not using a software and doing accounts on Excel use various control techniques. They can be simple as checking sums horizontally as well as vertically to complex formulas. Do don’t need to be an excel expert. Most functions can be clearly understood using the help function.

04 – Keep it Separated

If it’s a Company open a bank account. Most bank offer up to 2 years free banking. Sole traders should open a second current account dedicated to the business. Too many business owners mix and mingle their personal and professional finances. Set up separate checking accounts and if you need some funds from your small business, write yourself a check, or make a cash withdrawal.

03 – Review your charges monthly and ask for lower rates

You always have the ability to go elsewhere if the rates are better. Also, some credit cards try to take the discounts when the charges are submitted. Don’t feel obliged to agree. Remember how your customers get the best rate. Feel the excitement of being a customer and ask for more.  Seasonal times are good to call your providers and see if you can get better rates. You will be surprised by the saving by just asking.

02 – Buy accounting software

Using a spreadsheet program to keep track of your business finances is a good step. As your business grows this will become harder as you will have less time. Starting off with a software will enable you to grow in to it and make your business future proof. Most popular accounting software for small business does not cost more than £ 300.00 per year. Most Business Accountants include the software in their fees.

01 – Hire a pro if you need one

Yes, it will cost you. But just think how much a horrible accounting error might cost you, and your business. Dealing and being compliant with Statutory requirements can be time consuming and costly. You time should be dedicated on your core business. Hiring a pro will give you the peace of mind and freedom to grow. Finding a Business Accountant will enable you to consolidate this cost with your Accounting costs. Plus, they are much more experienced and have worked as FD’s in businesses so they speak the same language.

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