- August 19, 2020
- Posted by: Smith & Smith
- Category: Bookkeeping Service
Owning a small business can be very time consuming and stressful. To ensure the success of your business, it is necessary to keep your financial records in order. If you are struggling with the book-keeping of your small business, here are a few tips that will help you to succeed.
- Keep it simple:When starting off with the basic accounts for your business, always keep it simple. The backbone of any business is the chart of accounts. It will help you to keep track of every transaction that your business makes. Only set up accounts that you need right now, you can always add more categories later. Use general account names instead of setting up one for each vendor or account, make one account for the type of transaction that it will be.
- Have a plan:The best way to have a successful business is to have a successful plan. To stay on top of things, you should have a clearly defined budget or forecast and regularly keep a track of any deviations. This should be done at least monthly. By comparing your income, expenses and overhead costs against those you have in your budget, you can make the necessary adjustments immediately to avoid getting a shock at the end of the year.
- Get organized:No matter what line of business you are in, it will generate paperwork. Invoices, receipts, tax deposits, payroll, time cards, mileage logs, bank deposits, and statements—just to mention a few. If you carefully segregate, organize and store your paperwork, it will be easier to access them when needed. These days, most people choose to organize their files and store them digitally.
- Be punctual:Don’t put off your billing or bill paying. Delays can affect your cash flow and your bottom line. Some vendors offer discounts for payment made immediately. Know which ones those are and take advantage of the savings. Balance your checkbook as soon as you get the statement; this way you can address any discrepancies immediately. Checking your bank balance online will keep you in touch with your day-to-day expenses and income.
- Dealing with taxes:Taxes are the single most burdensome part of owning a small business. If you have employees, then you will be dealing with payroll taxes, state and federal, SSI and Medicare deposits, unemployment tax and, of course, federal and state business taxes and sales tax. All this is enough to make you feel overwhelmed. But this is where the fact that you need to be organized really comes into play as well as being punctual.
- Keep expense records:Many of your business expenses are deductions that you can take from your income tax, either business or personal. Know what these deductions are and keep detailed records and receipts to back up all the expenses you have.
Don’t be afraid to ask for help. Not everyone is up to the task of taking on the bookkeeping for their small business. Before you get lost in the world of papers and accounts, outsource bookkeeping services in Arlington, TX to Smith & Smith CPAs. Contact us today!