Many small business owners are having difficulties managing their finance. Some are even scared of dealing with it directly.
Thinking about it, most people—business owners or not, are not used to managing their finance. Since managing finance can be confusing and tedious, dealing with math and all.
But managing your finance, especially as a business owner is crucial for your business and future. Too many people who seem hardworking at managing their businesses are actually too lazy to manage their finance.
Remember that if you can manage your finance well, you’ll reap the benefits when emergencies happen. And will save your business during tough times.
I have gathered several accounting tips that can be very useful for many small business owners. These tips are designed to help you get the job done as easily as possible.
Hire an accountant
This might seem obvious to you, but many small business owners are reluctant to hire a professional. Hiring an accountant can help a lot. You don’t even have to hire them permanently, a few hours weekly should be sufficient for keeping your books organized.
An accountant can do a lot for your business, such as recording and classifying income and expenditures, file taxes, and strategic planning.
Your financial records will always be up-to-date, which is very convenient for you. The accountant can keep you updated regarding potential fees and expenses, loopholes, additional tax deductions, and many more.
Not only you’ll save time, but you’ll also get tax advantages. The time you save can be used for other things that can improve your business. That way you can get more income from the additional work hours you put in.
The cost of hiring an accountant is small compared to the additional revenue you’ll get. So, if your business has enough cash flow to outsource this, then do it.
Open a business bank account
Never mix professional finance with personal finance. It’s a recipe for disaster that could ruin your business. Creating a business bank account should be done as soon as possible.
By separating your personal and professional finances, tracking the flow of money is going to be easier. Filing your tax will also be much less tedious.
That’s why it’s always recommended to create another bank account for your business. No matter how small your business is or even when your business is still in the planning process, always consider this strategy. Lastly, your business must be registered and you must provide your business name in order to open a business bank account.
Improve your invoice
A bad invoice can only harm your business. The transaction process should be as clear as possible. All invoices then can be stored, so you can use them for future references.
A good invoice can encourage and remind clients to pay the right amount of money and on time. Also, to avoid confusion between you and the clients regarding the goods or services being traded.
If everything is organized, you can easily clients who haven’t paid yet and take the necessary measures.
Since an invoice shouldn’t be changed after it has been finalized, you need a reliable design for your invoice. Changing an invoice or making multiple versions of an invoice will confuse your clients and cause more problems.
Always ask for receipts for donations
If your business often sends donations to several charity organizations, always ask for receipts. You can get tax benefits from the donations that you made. And you need to be able to provide the receipts to prove it.
That being said, you should store all receipts. You should have a digital storage ready. Since receipts contain dates and other details, storing them for future references can be helpful.
Overall, all records must be kept accurately
I have talked a lot about keeping records, especially digitally. Hiring an accountant is basically to help you record every finance activity just like with other activities of your business.
Keeping accurate records might require more investment, but the result is worth it. The types of investment could be a professional or a piece of software, or both. Your accountant will thank you if you invest in a good piece of software to help them file your taxes.