Accounting has often been viewed as an extremely difficult task. Most business owners often call in qualified accountants to carry out regular accounting and bookkeeping for them. This comes with an extra expense.
However, what most people do not know is that accounting for small businesses is a relatively simple exercise. It is made even simpler when one uses the easy-to-follow tips below. The following tips will enable every small business owner to closely monitor the performance of their business while still saving on the cost of an accountant.
- Maintain daily records of financial transactions.
It is very important to maintain records on a daily basis. This ensures that no transaction is left out and thus gives the most accurate records. At the same time a regular review of the records will help in knowing the direction of the business and help to manage cash flow
- Treating the business as a different entity from the owner.
Accounting for small business demands that a bank account for the business earnings and expenses is kept separate from that or those of the business owner.
- Keeping all receipts makes bookkeeping much simpler.
This will further include: tax return information, bank statements, invoices, records of stock taken and anything that has a monetary value to the business.
- Fulfilling all tax obligations is a great bookkeeping practice.
The paying of taxes as required by law and keeping all the tax receipts safely will avoid the business owner a lot of stress in the future when required to prove the same to the authorities.
- Lastly, get easy accounting software that suits the business requirements.
We will talk about that along with some beneficial daily habits in our next post.