Small Business Accounting Guide and Tips

Every small business has the potential to grow exponentially and overwhelm its local stakeholders. Without careful and dutiful bookkeeping and consequent accounting, such growth cannot be met, and it is only with the same that such growth can be ratified, sustained and encouraged. Most small business owners fail to realize just how critical good booking and cash flows can be for the profitability and legal well-being of the same. I will not try to persuade you to take better care of the financial records for your business. However, I will give you a few tips for improving the financial situation and consequently the economic health of your enterprises.

Tracking All Financial Transactions
The only goal for you in business should be to amass revenue source, increase assets and improve profitability. Therefore, all activities that bring in cash to the business should be tracked, increased and be made more efficient. Such progress can only be made possible if every transaction leading to an influx of money is recorded.

Where most small businesses are not complex enough to use a system of cash tracking that details exactly when payments are meant to be done and when exactly such transactions are done. Such a method, unlike the basic cash flow system. Though the risk of double entries does exist, it is only a beginner’s mistake that can be calculated and corrected. The implications of not taking into consideration the implications of advanced and delayed payments do carry heavier fiscal dangers than simple clerical errors. Therefore, unless you are the sole bookkeeper and decision maker faced with a daunting hurdle of making time for business activities and accounting, opt for the complex method of computing all financial transaction.

Consult Accountants, not employ them
Accountants are very expensive and keeping them on the payroll could be the demise of your business. However, no business can survive without the periodic counsel of qualified accountants. While bookkeepers maintain the financial register of business, accountants interpret such records and make suitable recommendations. These recommendations help small businesses surpass legal and regal hurdles, economic hurdles and looming business risks. Employ bookkeepers but indulge accountants on a need-to basis.

Set Appropriate Annual Business Dates
Every government financial year brings with it new tax policies that could make, bend, or break your business. Therefore, it is crucial for businesses to formulate business calendars to go in line with the government year. To be tax compliant calls for timely preparation of tax documents. Thus, businesses need to close pending businesses and settle their expenses prior to such deadlines to have a full financial overlook of the enterprise.

Awful Deadlines
Time, in business, is as valuable as the money in question at that particular time. In all endeavours of the business, entrepreneurs have to be diligent not to miss any key financial deadlines. Missing deadlines in paying debts or meeting financial debts could be the demise of any business. Good businesses have been branded defaulters not for lack of will or means to meet such obligations but simply since they were not organised enough to arrange such transactions. Others spend money meant for critical functions on meagre issues and hurt the cash flows of the business causing revenue sourcing transactions to slow down.

The repercussions of such delay could include:
• Hefty fines
• Withdrawal of credit facilities
• Disassociations
• Lawsuits
• Closure

 

For more information, visit: Linghams Chartered Accountants.

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