Your small business needs accounting. When you have so much work to do with so little time and help to do it, forgetting to keep accurate financial records seems natural. When the receipts, bills, bank statements, and unpaid customer invoices pile up, however, you will suddenly realize your need to invest time and money into sound accounting practices. When tax time comes, you’ll probably wish you kept up with things. These four accounting hacks for small business will help your business stay on the right track.
1. Keep Records Organized
When you operate a business, you need to track expenses and keep your records organized. Every time you or an employee spend money for a business-related purpose, you must keep your receipt or invoice along with a note explaining the reason for spending the money. Also, you need a predetermined location to store your expense-related documents until they can get entered into your accounting system and filed away.
2. Get an Accounting System
Struggling to use paper ledgers or spreadsheets for your accounting needs saves money, but puts strains on your time and organization. An accounting system can track every aspect of your business including inventory, sales, accounts payable, and other important accounts. You can get cloud-based software for a monthly subscription fee that keeps your records accessible anywhere from anywhere with a connected computer or device, making it easy to update your records and run reports from home, at work, or on the road. If you insist on using spreadsheets, take the time to assemble some basic accounting spreadsheets before your business officially opens.
3. Pay Attention to Operating Costs
You can have fantastic sales only to find out too late that your business has been losing money.
You can price yourself out of business if you base your selling price only on the invoice cost of the items you sell. You must add enough to cover your business material, labor, and overhead including lease costs, and utilities. If you have employees, you should also include the cost of labor as part of your selling price.
4. Get Help, If Needed
If you get a sense that your business accounting has not been up to par, don’t procrastinate. You must have the ability to account for all the transactions your business performs to properly manage your business and file taxes. Get the help of a bookkeeper or accountant that can help you get control over the financial aspect of your business. You might think you can’t afford to pay for accounting services, but in reality, you can’t afford to have your business finances in a mess.
Accurate accounting information forms the backbone of your business. Use these four accounting hacks for your small business to start getting serious about your money.