Simple Tricks for Maintaining Accurate Small Business Accounts
Running a small business is tough at times. There are a hundred things to think about and updating the books is probably not top of your to-do list. Yet, it should be, as up-to-date accounts provide a small business owner with an accurate snapshot of the business’s current financial position. And as any SME knows, cash flow is king.
Maintaining accounts need not be a huge time drain. Once you have a system in place to streamline the process, all you need to do is add invoices, payments, bills, and any other financial information on a daily, weekly or monthly basis. This is far better than turning up at your accountant’s office the day before it’s time to file a tax return with a bag of receipts and a few crumpled bank statements.
Take a Course in Bookkeeping
Smart business owners have a basic understanding of how bookkeeping works. You don’t need to be a qualified accountant to be a successful business owner, but it really does help. Since you probably don’t have time to take a degree in accounting, your best bet is to take a few basic accounting classes at community college or sign up for an online course. It’s not about earning a qualification. No, it’s more about better understanding how to crunch the numbers and perform simple tasks like your bank reconciliation.
Organize Your Accounting System
Once you know how bookkeeping works, start using an accounts software package. There are many online accounts packages to choose from, so take your pick. QuickBooks and Sage are well-known packages, but if you want a free system, look at GnuCash or Money Manager Ex.
Hire an Accounts Assistant
Someone needs to take responsibility for keeping the business’s accounts updated. In the early days, this person will likely be you, but as the business begins to grow, it is worth hiring an accounts assistant to handle the day-to-day bookkeeping. You need someone reliable, honest, and with a head for figures and an eye for detail. Take your time and make sure you hire an assistant with experience of small business accounts. They don’t necessarily need to be familiar with the system you use, but it helps.
Have an organized filing cabinet for paperwork such as receipts and invoices. Consider scanning paperwork and storing soft copies of all paperwork in an online database, as this makes it easier to find and frees up space in the office. It is also more common these days for businesses to send electronic invoices and receipts.
Use an Accountant for End of Year Procedures
There is no reason why you can’t handle the bookkeeping, but it makes sense to hire an accountant to take care of your tax affairs. They understand the taxation system and can advise you on ways to save money on your tax bill.
Ask other businesses in the area if they can recommend a good accountant and make sure anyone you hire is suitably qualified and licensed.