As a small business owner, keeping track of the details of your financials can sometimes go to the back of the mind. But when there’s no system in place, unpleasant surprises can change your financial situation drastically. Here are five easy tips to follow for small business accounting success:
- Prepare for Taxes by Setting Aside Money
Systematically setting aside a certain dollar amount throughout the year to prepare for tax season
will ensure that you’re not caught off guard and unable to pay your taxes. Make sure you note tax deadlines on your calendar and give yourself plenty of prep time in order to meet the deadline. Making this a regular practice will keep you on the right track and away from making the worst small business tax mistakes such as dipping into employee withholdings.
- Watch Carefully Over Your Invoices
If you don’t have the time to review your sent and received invoices daily, make sure you have someone else on it. Don’t let your revenue sit in someone’s inbox while you’re struggling to pay your bills, keep track of what’s coming in and when. Stay on top of late invoices and give yourself reminders to contact those who haven’t paid. There’s no reason to feel like a bully for going after overdue invoices, every late payment is an interest-free loan that hurts your cash flow.
- Plan For, and Accept, Major Expenses
You could let your software go so far out of date that eventually it just crashes your entire system and no one can read your files, or you could plan to stay up to date and purchase new software on a routine basis without hurting your financials. Small business accounting allows for big purchases; you just have to properly plan for them. Schedule major updates in your calendar and give yourself weekly reminders to budget up to the expense. Keeping your business functioning properly and maintaining solid financials is a win-win.