Are you trying to figure out how to do your own accounting? Read this article to learn about accounting for small business owners.
Small business owners often possess a very can-do attitude. They need it to survive the stress and potential for failure that goes hand-in-hand with running a business. This attitude often extends into handling your own accounting.
Accounting for small business owners isn’t necessarily simple, but it is something you can do. It takes the right combination of diligence, tools, and time management. Keep reading and we’ll delve into some of the most important aspects of this task.
Invest in Good Software
Your finances simply matter too much for long-term business survival for you to go with second-tier software. Take the time and find an accounting software solution built around your kind of business. Look for key features, such as:
- Accepts Payments
- Inventory integration/management
- Invoicing
- Bank integration
- Report generation
- Payroll
Setting up with the right software from the outset will save you time and work later.
Track Your Expenses from Day One
Too many business owners don’t start tracking expenses right away. It’s only down the road when they start wondering where the money goes that they begin tracking expenses.
Tracking your expenses means you maintain strong financial awareness of your business. As a bonus, it also means you can get a little break on your taxes in write-offs.
Stay Diligent about Paperwork
Odds are good that you’ll need to make quarterly tax filings and possibly payments. Even if you file everything online, you must stay on top of this paperwork. Note it on your calendar and set up digital reminders to assemble your records early.
Don’t fall short on other kinds of paperwork either, such as pay stubs for your employees. Not confident about building a pay stub from scratch? Use an online generator like thepaystubs.com to make them.
Make Finances Part of Your Schedule
Small business owners rarely suffer from too much time, but you must block out time in your week for financial review. If you handle your own accounting, you can’t put it off for a month or you’ll spend days buried in numbers.
Set aside several hours at least one day a week where all you do is look at the books. Not only will this make the process more manageable, but it’ll also let you spot problems faster.
Consider Outsourcing
Many small business owners can do their own accounting at first because their taxes are comparatively simple or their income is small. If your business grows and you need to take on employees, though, it gets much more complicated in a hurry.
If that’s your situation or you simply don’t understand what you should do, it’s probably time for you to outsource your accounting needs to a professional. Getting your accounting wrong can trip you up with your taxes and that invites a world of trouble.
Parting Thoughts on Accounting for Small Business Owners
Accounting for small business owners is all about setting yourself up for success.
Get good software. Track expenses. Block out the necessary time to look at the books every week.
Do these things and you’ve got a good shot at staying on top of things. If you ever get lost or in trouble, though, seek out a professional.
Looking for ways you expand your financial knowledge? Look at some of the other articles in our finance section.