Whether you’re starting your first-ever small business or are looking to expand your career, one of your first steps should be getting your financials in order. There are many branches of financial management in a small business that require your utmost attention to detail. From payroll to marketing to tracking expenses, creating (and maintaining) accurate and organized accounting information in your small business is essential to your success.
If you feel overwhelmed and anxious about your financial records and keeping things up to date, you’re not alone. Accounting is something you want to stay on top of at all times so that your records reflect the correct amounts and so you won’t have to go through the stress of catching up on your financial record keeping. Thankfully, with a few adjustments and short-term goals, you can easily keep your small business accounting in excellent order.
Here are some small business accounting tips from our team at Accelerated Results 365 to help you organize your financials:
Track Your Business Expenses:
In order to get an accurate snapshot of your business’s financials, you’ll need to track and record your expenses diligently. By doing so, you’ll have a better idea of any recurring expenses that your business has month to month, and you can record and identify which business expenses can be written off for tax purposes.
Separate Personal and Business Accounts:
Keeping track of your financials is hard enough, let alone separating the expenses after the fact. Save yourself the time and energy of weeding through your bank statements by opening separate personal and business accounts. More importantly, you can avoid paying extra taxes and heavy fines when audited by the IRS.
Create a Profit and Loss Statement:
The Income Statement (often referred to as the Profit and Loss Report or P&L), Balance sheet, and Cash Flow Statement are your three main reports. Even if you are using a bookkeeper, you need to be familiar with these and what they represent so that you have a handle on your financials and the health of your company. This will also help protect you from fraud. This record shows an accurate picture of your net profit by writing out the profit (income) as well as the losses (expenses). We recommend reviewing and revising your profit and loss statement on a monthly basis to ensure accuracy.
Use Accounting Software:
Virtually everything is available online, including some top-of-the-line accounting software. There are many accounting software options to choose from depending on the needs of your small business. Do your research to identify which ones fit your needs and budget.
Need more tips on how to implement a strong accounting foundation for your small business? Accelerated Results offers business consulting in Seattle and the surrounding areas. Schedule a consultation with one of our business consultant professionals today!
