Having your own small business can afford you many benefits, but it also comes with a large share of responsibilities. One of the most important responsibilities of a small business owner is accounting. Efficient accounting can mean the difference between saving potentially thousands of dollars, or losing funds without really understanding why. Some business owners utilize the services of an external accountant to handle the business? accounting needs, but if you choose to do it yourself, you might want to read these tips, designed to help you improve efficiency and save money.
1. Be Organized
In order to ensure efficient and proper accounting, you need to make sure you have everything properly organized, from receipts to expense reports to invoices to weekly payouts of salaries. Organize all items in a filing cabinet, using a thorough system that makes it easy to find exactly what you are looking for, when you need to find it. Don?t just simply stuff everything into one folder?keep receipts separate from utility bills, and so forth.
Advanced accounting software is extremely cost-effective. Provided you consistently enter information into the software in a timely fashion, you?ll be able to keep track of absolutely every penny and quickly find information with a few clicks of the mouse.
2. Use Cash
Cash is neater, both for you and for vendors or suppliers. There re specific benefits to cash accounting, such as being able to eliminate extra bills for interest or additional invoices, and making it much easier to quickly determine your profit margin. When using cash, you?ll typically only have to file receipts. Additionally, deposit cash into your account right away so that it can recorded and counted quickly.
3. Request Detailed Bank Account Statements
Getting a bank account statement once a month is a great way to double-check your own records. You?ll also know if you still have any checks that outstanding so that you can make a more accurate count of funds available in the following month. Checking your bank account statement on a monthly basis will also make you aware of any unauthorized or suspicious activity with your account.
4. Schedule Time for Accounting
Many business owners put off performing accounting tasks until the end of each month, or even longer, and then find themselves with a large amount of often confusing and tedious work to do. By scheduling time to record transactions, perform filing duties and enter accounting information into your accounting software at least once a week, you?ll stay more organized and efficient. You?ll also be able to keep better track of bills needing to be paid, or outstanding invoices that are due soon or already overdue.
5. Keep Backups
In addition to ensuring your computer software and accounting information is backed up each day, you?ll also want to keep all paperwork. This will help in case you need to double-check some figures at some point in the future, as well as enable you to check if everything has been entered correctly. Keeping all your paperwork and records organized is also useful for internal audits. Additionally, keeping invoices and checks in dated or numerical sequence also improves organization and efficiency.
The IRS also sometimes requires you to furnish records or receipts, and having everything already well organized will save you the hassle of tying to locate and organize a bunch of records in short notice.
About the Author:
Gwen Stewart is a business development professional and writer for Outbounding.com on behalf of ShareFile.com. Her line of work requires she have a reliable solution for file sharing as well as a solid strategy for meeting tight deadlines. Any spare time she can scrape together finds her hiking, reading and enjoying the company of great friends.
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Source: http://usanewsbrief.com/2012/12/5-small-business-accounting-tips/
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