Running a small business is a difficult task. As a small business owner, you have a lot on your plate. When you’re managing employees, dealing with customers, taking care of inventory, and doing everything else, managing your finances may feel overwhelming.
However, small business accounting is incredibly important. Did you know that nearly 50% of small businesses fail by their fifth year?
Often, this is because of mismanaged finances. Businesses that spend more money than they earn quickly go under.
We want to help keep that from happening to your business. Keep reading for our top small business accounting tips to help keep your business in the black.
- Save Every Receipt
One of the most important small business accounting tips is to file all of your receipts. However, this doesn’t mean having a box or bin full of receipts tossed in randomly.
You need to organize your receipts based on the type of expense and the date. You can refer to these receipts later for important details about what you bought and when. This will be important come tax season.
- Accurately Record Your Cash Flow
As a small business owner, you need to constantly make sure you’re numbers are adding up. Keep a diligent and accurate record of all incoming and outgoing money.
We suggest creating a spreadsheet to document all of your expenses and record your earnings. This will give you an accurate representation of your profit and loss statements each month and will prepare you for your taxes.
- Get Professional Advice About Taxes
Speaking of taxes, unless you’re a CPA, don’t try to do your business taxes on your own. You may be fully competent when doing your personal taxes, but business taxes are much more complicated.
You need to talk to a professional accountant to help you understand quarterly payments, tax credits, write-offs, and more. They may also be able to provide you with some valuable bookkeeping tips.
- Keep Your Personal Finance Separate
One of the most basic small business accounting tips is to separate your business finances from your personal finances. Even if you run your business on your own and have little overhead, you must separate yourself from your business. Get a business checking and savings account for your company.
This will significantly simplify your life when it comes time to file for your tax return.
- Know When You Need to Hire Help
Finally, understand that even the most competent and hard-working business owners need help sometimes. You may need accounting help, marketing assistance, website development, payroll outsourcing, and more. It’s okay, no one expects you to do everything on your own.
If you need more help than small business accounting tips can provide don’t hesitate to make room in your budget for these vital services.
Looking for Advice Other than Small Business Accounting Tips?
We hope our small business accounting tips have helped you get your financial house in order. It may feel a little tedious, but following these tips can save you time and money in the long run.
And if you’re looking for more, check out some of the other articles on our blog for more advice on things like finance, marketing, and other business-related information. We have tons of content created for people just like you.