Lets face it, unless you’re a total number nerd, you’re unlikely to get excited about accounting. Even when it’s your own business, the prospect of sitting down to do the books is rarely exciting – it is, however, necessary. Keeping on top of your business finances will not only let you know how things stand but, will also help you with your tax returns. As a wide pull up banners printing business which has grown rapidly, we can testify to the importance of getting into good accounting habits to avoid headaches further down the line. Although we’re not claiming that we’ll ever be able to make your accounting fun, our five tips will at least take the brain pain out of the process.
Tune into the tech
Even if your business is just starting out, online accounting software is a vital investment. There are lots of reasonably priced packages out there and, most are really easy to use. For the small business, a system such as QuickBooks can help save a lot of time and hassle – particularly if you’re new to accounting. For slightly larger companies, Xero is a collaborative program with a bit more oomph to help keep you on the straight and narrow.
On the cards
Where possible, use a business credit or debit card to pay for business-related expenses – even the small ones. Using a card provides you with an instant record of outgoings and saves you rooting around for those elusive receipts. In addition, a well-chosen card can provide you with rewards that may be useful for your business.
Remember those good habits we talked about? This is one to put into place the moment that you start doing business – setting up your chart of accounts. A Chart of Accounts (COA) is the act of allocating codes to different kinds of transactions within your book-keeping. This allows you to compartmentalize the different kinds of expenses that your business is subject to and, to keep them in order. The following diagram is an example of a company with lots of different listings but, smaller companies are likely to have a lot fewer to deal with.
Back it up
This one is common sense – but important nonetheless. As with all other aspects of your business, your accounting data and communications should be backed up regularly and stored securely. Even if your business is tiny, it’s vital that you’re able to lay your hands on accounting information quickly and easily should the need arise. Any notes or communications made by hand – and any signed documents – should be scanned and added to the archive for easy access when needed.
Enlist a professional
Even if you intend to do all of your accounting yourself using some of that clever software we’ve mentioned, it’s a good idea to have an accounts professional to hand. For a small business just starting out, you probably won’t need a full or part-time employee to handle this for you. Instead, find a local company or individual who is happy to work with you on an ad-hoc basis. Make sure that you shop around as fees can vary quite a lot and, try asking for recommendations from other local small businesses. Use your accounting professional once or twice a year to check that your accounting is in order and to advise you on investment and tax matters. Even if you have a good grip on your accounts, having a pro to hand will give you the peace of mind that you’re on the right track – leaving you free to concentrate on running your business.
We’ve said it before but, it’s worth repeating. Accounting for your business is all about establishing – and maintaining good habits by putting processes in place. If you make sure that you follow your processes faithfully, your accounting will begin to take care of itself until you’ve grown enough to justify the hiring of a regular book-keeper.
This article was contributed by ben. You can visit his website here ultimatebanners.co. Ultimate Banners are the premier British printer and sign maker based in Birmingham UK.