Small business owners have to handle a lot of day-to-day jobs. Accounting is many people’s least favourite task, but it has to be done – and it has to be done right. That’s why we’ve put together some simple accounting tips for small businesses to help out with the chore.
Use accounting templates
With so many different documents involved in accounting – from invoices to revenue reports – it’s important that you get the details required for each correct. The easiest way to do this is to use pre-made templates. Companies like FreshBooks.com have lots of templates and useful accounting software that make it easy to do this yourself without needing to spend hours making documents.
Record everything
When the time comes for you to file your business’s taxes or provide reports to investors, the last thing you need is missing documents and records. The best way to avoid this is to make a habit of recording everything. Whether it’s a lunch expense or an insurance claim, make sure it’s in your records. Creating an effective labelling and categorizing system for your business records, including separating business and personal expenses, will help you find the information you need quickly.
Keep accurate inventory records
Misplaced, damaged, or stolen merchandise can wreak havoc on your records if not recorded properly. Maintaining inventory records that include quantities, stock numbers, dates purchased, purchase prices, and dates sold and selling prices is essential for any business’s bookkeeping. Make sure these records have a useful space for recording when problems occur too.
Follow up on invoices
Creating, sending, and recording invoices is an essential part of accounting for small businesses. But sending an invoice doesn’t always mean that it has been paid. As part of your record-keeping, set deadlines for when invoices need to be paid and follow up if they are not. To automate this process, accepting online payments at the point of purchase will eliminate the chasing up side of invoicing.
Hire professionals on a temporary basis
Hiring a professional to handle your small business’s accounts doesn’t mean you need to pay them forever. Hiring someone on a temporary basis means you can bring someone in to organize your records if they need it or to check records before important times of the year like tax return season.
Use accounting software
Very small businesses might start off by keeping their accounting records in an Excel file, but this isn’t practical long-term or if you plan to scale. Luckily, there is a lot of well-priced account software out there. Accounting software automates the bookkeeping process, reducing the chance of errors and saving you time.
Take a free accounting course
Accounting isn’t easy, but if you’re committed to doing it yourself you should make sure you have all the skills and knowledge that you need. There are lots of free accounting courses out there, such as this one from The Open University. This will give you the basic skills you need so that you can confidently manage your own accounting in the future.
