We all know very well that running a small business is hard work. As your business grows, managing your finances properly becomes extremely important.
Top 5 Tips to help Accounting for your Small Business
Keep your business and personal expenses separate
While it’s possible to pay back your company for business expenditures, keeping separate bank and credit card accounts will save you hours of work and help you keep track of all your tax-deductible expenses in one place.
Do not make the mistake of doing your own taxes
Small business owners frequently save money by relying on computer software to take care of their taxes.
While this might seem cost-effective in the short term, not hiring a professional can cost the business owner down the road due to unclaimed deductions or underpayment which can lead to audits or penalties.
Expect the unexpected when it comes to expenses
When starting a business, it can be difficult to predict future expenses such as equipment repairs or software upgrades. In any business, try to leave a solid buffer for expenses in the long term.
Do not underestimate employee costs
Employees are very likely to be one of your biggest assets as well as expenses. When hiring, remember to consider the costs of payroll taxes as well as insurance and health coverage.
Don’t forget to get paid!
This may seem obvious, but you will be surprised at how many small business owners don’t properly track invoices and customer payments.
If you’re not keeping records, it could be months before you realize you have outstanding invoices. I hope you have found these tips to be helpful.