24 Feb Five Important Accounting Tips For Small Businesses
As a small business owner, you should consider the ability to be well-organized as one of your most important business skills. It is undoubtedly important for all facets of your business but it is crucial when it comes to accounting.
Of course your focus is on the product or service you offer and making sure that your customers are happy and will come back for more. The problem, when it comes to accounting, is that small business owners often have to do quite a lot of it themselves.
Here are five important accounting tips to help you be well-organized so that you can focus on your business:
Your Tax Accountant is your friend
Your tax accountant is a great resource – so use him or her. Don’t just wait till tax time rolls around. Talk to your tax accountant about what would make it easier for them to assist you.
My tax accountant helped me set up an easy to use spreadsheet for capturing data, that he can then work with when filing my tax return.
Be on time, don’t double handle
Okay, so with the help of your tax accountant, you’ve set up the spreadsheet or other method of capturing that all important financial data. But, the system it will only be as good as the data you input. So to save time, input data as soon as you receive it. Don’t shuffle it around your desk!
Set up a file of hard copies
Yes, I know that in the digital age we are all supposed to have paperless offices. However, I believe that it is good to always have hard copy backup. Online data can become corrupted. So I file hard copies of receipts, invoices and other accounting related information. I find that it is easier to file by date but you may prefer to file alphabetically or by project. Whichever way you chose, do it straight away – as per point 2, don’t double handle!
Make use of electronic bank statements
Electronic bank statements are another reference point to keep track of incomings and outgoings. I put mine in an online folder which I keep in a portable hard drive. Of course you can access directly from your bank but this can take time.
Note: points three and four are important in case of internet outage. Some people favor using cloud storage but I don’t recommend that with potentially sensitive financial information. And again, there is an outage you won’t be able to access the information.
Make use of your desk diary
I use a financial year desk diary to note transactions. You don’t need to write a lot of info – something that will jog your memory is enough. Diary notes are often cited in legal cases along with memos and emails, so in the unlikely or unhappy event that you end up in a dispute with a contractor or supplier you made need to fall back any notation made at the time.