If you own a small business, there is one time or the other when you have faced some issues with the accounting and financing, right? You can manage this accounting effectively with proper planning. In this article, we bring you some of the best accounting tips that will help you in improving the finances of your business.
Make a Decision about Hiring Bookkeeper or Going for Accounting Software
Almost every business owner goes through a phase where they are confused with accounting and finances. It is important for you to get an effective solution to this problem. There are two choices that are present before you-you can either hire a bookkeeper or opt for accounting software.
We suggest you go with the accounting software because it will save a good amount of time and one cannot make any errors. The software will be a cost-effective option when compared with the bookkeeper and small businesses should be careful with spending money right. So this is a smart choice or consider an A-Systems Job Costing.
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Open a Separate Bank Account
Make sure that you have a separate bank account to receive and process the payables of your business. Every transaction of your business must be made via this account only. This way you will be able to track the expenses with ease. For this, you could get a payroll software that integrates with the accounting.
You can open an account on the business name directly. The entire bank opening process won’t take much of your time so make sure to open a separate business bank account. Before selecting a bank to open an account, do some research.
As you are opening a business account, the fees may be more so check the fees of various bank accounts and other privileges they offer before choosing one.
Track Your Expenses
This is the mandatory step that you have to take in order to know where your money is going. You should learn to keep the track of your expenses effectively and this will help in monitoring your growth. You have to follow this process from the start or if you have missed out back then, start doing it from this minute because these expenses will play a crucial role in your business.
Here are some of the types of expenses that need your special attention
- Meals and entertainment
- Home-related expenses
- Business trips expenses
- Vehicle-related expenses
- Receipts for the gifts
These expenses are something to which we usually won’t pay much heed to. But they are important so keep a track of them for sure.
Keeping the track of daily expenses will give you a rough idea of how much budget you need for the next upcoming month. This way you will be able to stay alert and take necessary action about your next months.
Make Sure to Receive Payment on Time
This is another important aspect that needs special care. As you are just starting out, you will face so many clients and customers who try to delay the payment. This is a common practice for all kinds of businesses. So insist on receiving payments right on time.
Add a clause that you will charge extra amount if the client won’t pay their due in time. Withhold the material or service that you offer until and unless you get the payment. The receivables column may have huge numbers but it isn’t money until and unless you receive it into your bank account.
The receivables are crucial to keeping your company afloat and it is important for you to stand firm in this aspect. There is some accounting software that will send reminders to the clients about payments on behalf of you. This feature will help you a lot.
Investigate about Importing Tax
If you own a product-based business, then there are times when you have to import the products from other countries and you will be levied with import tax and duties. So it is important for you to learn how much tax has been levied on you and what is the tax percentage for the products that are imported from different countries because the tax varies from one country to another. You can use a duty calculator to know about these importing taxes.
Know Tax Obligations
It is important to know about the taxes that will be levied on you by the government. There are various types of tax procedures depending on the type of business you conduct. These taxes vary from one country to another so do a good amount of research on your countries taxes and make sure to file them perfectly.
Global tax compliance software will help you a lot in this tax filing process. It will generate the reports of the finances of each month accurately and this will make entire taxation procedure easy.
These are some of the accounting tips that will aid your small business and improves business finance.