ACCOUNTING BEST PRACTICES FOR SMALL BUSINESSES

B2When it comes to looking after the welfare of a business, accounting tops the list as being the most important. Without proper accounting, a business runs the risk of losing everything. The following are a few best practices that are essential for businesses to take note of.

  1. Check it off your list first

Proper accounting should be a priority from the start. Not only is keeping accurate books crucial to your company’s financial health and success, but it will only get more complicated down the road if you keep putting off until later.

  1. Focus your time and energy where it’s needed

Though there may be a period when you’re responsible for a wide variety of roles, take time to evaluate where your skills are most needed and best used. The chances are this isn’t the accounting department… identify what you need to do to make sure your time is spent effectively and efficiently.

  1. Get the right software

Without the right software, it will be difficult to keep track of what’s going on in your business. There are plenty of services out there to help you keep your finances, including payments, invoices, payroll and taxes, organised and in check. Identify which tools you need for your business activities and look into different options by taking into consideration your company size, growth rate and location.

  1. Never overspend

Just because a software package is the most sophisticated and expensive, doesn’t necessarily mean it’s the right software for your company as many small businesses won’t need enterprise-level services. Furthermore, more complicated software doesn’t do you any good if you don’t know how to fully utilise it.

  1. Hire a professional

If you are not familiar with accounting processes and are sure you don’t know what you’re doing, then it is the best option to hire a professional to get the job done for you. This is one area where you cannot afford to learn by trial and error.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)

ACCOUNTING TIPS FOR A SUCCESSFUL BUSINESS

B4Running a business has many challenges, from building clientele to employee relations. However, one of the biggest challenges a business may face is keeping abreast of important accounting practices. This is vitally important because without the proper practices in place, your entire business may be placed in jeopardy.

  1. Keeping records

The most important thing regarding your financial records is keeping everything in one place so you don’t have to worry about meeting a request, and it is also to keep everything simple. To make matters easier, you can try using online banking.

With online banking, you can track simple debits and credits to your account. However, when it comes time to accurately state how things were spent or earned, separate bookkeeping records should be kept. Perhaps you should consider investing in an easy accounting software, which you can use to track money coming in and out daily.

  1. Invoicing

Invoices are more than just prompts for your clients to make payments. They’re records of the terms of a transaction, and because of this, it’s critical that you enter information that is accurate and complete. It’s also important to understand what the difference is between invoices and receipts.

Reworking or adding to an invoice, creating multiple versions, or cancelling an inaccurate invoice will only confuse the accounting process and make matters difficult. Furthermore, accurate invoicing ensures that if your clients ask any questions regarding a payment, you will be prepared with a record of previously-agreed-upon terms under which you and your clients operate.

  1.  Collecting taxes

Taxes need to be taken out at the time of sale or at the time payroll is generated. Just like with receipts, the longer you go between a transaction and proper accounting, the more room for error there is and the more risk you expose your business to.

You need to collect (or apply) taxes as soon as a sale is made or immediately upon payroll generation. That will ensure that you don’t incur penalties for delayed tax payments. This will also help your accountant keep as much profit as possible.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)