7 Small Business Accounting Tips to Save Time and Money
Having your finances in order, you can easily bridge loss and profit problems. To help you with accounting, here we are sharing the top 10 small business accounting tips that will surely guide you on points that you should consider taking care of.
1. Handle Transactions Digitally
Don't use cash for your business transactions, always handle these transactions in a digital way that can be from your bank's mobile app or software you may use for bookkeeping. This will help you generate profit/loss statements easily and also help you understand what and where you have spent your business-money. There are many other benefits or digital transactions such as:
- Error-free Transactions
- Always on Record transfers
- On-time Payments
- Instant and smart account statements
These are the things that you should consider in your first step towards handing business accounting for saving time and money. It will help you adapt to the next levels easily.
2. Separate Your Accounts
The most common problem with most of the startups and small businesses is the owners don't separate their personal and business accounts. They keep one account from which they apply for a loan, they manage their personal payments and business transactions in that one account. This type of bank account could easily mess up everything and you will have a hard time calculating what you have spent for business and what you have spent for your family or yourself.
So, you should have at least two accounts:
- One for your personal use
- One for your business use
- If possible, third (company account) for loan and investments
This will surely help you to avoid more expenses and have a clear path of what you are spending and where you are spending and what you are saving then from where you are saving.
3. Use A Bookkeeping Software
There are many accounting software available in the market like QuickBooks, Sage, FreshBooks, ZipBooks, and more. You can use any one of these softwares to help you with keeping a record of your sales, expenses, and profits. Always remember that bookkeeping software is a great help for preventing huge losses in small business accounting. You can also try cloud based accounting software apps like QuickBooks Enterprise Cloud Hosting based on desktop as a service technology for advanced bookkeeping.
Good accounting software can help you with tasks like:
- Linking your credit card or bank account to the software
- Paying invoices and generating custom invoices in software
- Generating loss and profit statements in the software
Some of the bookkeeping software and applications can help you more with your small business accounting by giving you tips on how you should spend your profits and make your business grow.
4. Audit On Daily Basis
You know how large banks make sure that there is no loss of even for a penny every day? They do audits at the end of every business day. They ask every branch manager to make a report about every single penny that has been into transactions of that particular branch. So the manager put employees to work and generate an audit report of all the transactions and then make sure that received and sent money has been handled carefully.
This way, they have no losses or if there is something missing, they can address that issue on that same day to avoid a bigger loss after a month or quarter.
You can do the same thing, and help your small business to easily focus on growth and have money on payroll days and also manage your profit/loss statements and save time by not taking any day off just to audit your expenses, which will boost your growth rate for sure.
5. Take Control Of Budgeting and Payrolls
When you have data about how much you spend, profit, and also the data of your high sales and low sales with dates. You should keep an eye on your budgeting and payrolls. You should take notes on how you are paying your employees and what are your policies for their over-time working hours and how much you are paying them for that vs how much should be paid according to your business growth rate.
This is pin-point where you have to work and calculate a budget that can help you hire and fire employees according to sales, events, and profit/loss statements of your small business. As payrolls can often keep business to grow. That's why you should consider cutting these expenses when required and raising salaries of employees when possible. The best thing is that, there are many software and computer tools that can help you with that and also your bookkeeping software will be able to do it for you.
6. Hire An Accountant
This may add up to your monthly expenses and maybe not good for every small business. So, if things are in your favor and you are already growing your business, hiring an accountant could help you to automate things and spare some time for taking the business to the next levels.
An accountant will handle all of your daily, weekly, and monthly expenses, sales, payrolls, accounts, making reports, and using the bookkeeping software to help you get the data that you should read and know where your business is standing.
These tasks can be a back pain for a small business owner as he/she has to do many other things and handling accounts at the same time can be tough. So, if you can afford (even for a few months) you should hire an accountant.
7. Future Proof Your Small Business
The last and not to avoid small business account tips for saving money and time and making your business grow steadily is to future proof your small business.
How to do it? Simple:
- Calculate your monthly profits and expenses
- Do it for your first year of operating
- After one year, see where you stand and if your business is profitable, keep going
- If your business is in loss, revamp and check where you are losing it
- Cut expenses, cut staff or try different marketing channels to increase sales
- If things don't go well in next year, you have to think again and research if the market is crashing or your competitors are in loss too
- If your competitors are not in loss, they are enjoying profits, check what they are doing differently than you?
- See if you can do that better and if you are not able to lift up, you should think about funding or working more harder in hope that things will go right
The thing here is, do not give up. Yes, giving up is not the solution. You have to fight and if possible find loopholes, fill the gaps and market your products or services more nicely.
Again, if you can do your small business accounting in a proper and professional way, you can enjoy growth and profits.
