Balance sheet, cash flow, and income statements are examples of financial reports you should generate at the end of each cycle. These statements will help you learn where your business stands. To generate these documents, you’ll need to take care of your business accounting duties.
You may be considering outsourcing these responsibilities, but you can do it yourself. Believe it or not, it all comes down to learning how to maintain organized and accurate financial records. Don’t know where to start?
We’ve got you covered. Here are 5 tips to take care of your small business accounting duties.
- Record All Your Expenses
You may be keeping a copy of your bank statements to track your expenses. If that’s the case, you might have stumbled into a charge and don’t know what it is.
It’s recommended to keep a log and receipts of all your expenses. Consider placing all your receipts in one place or taking a picture of each one. Recording your expenses will help you maintain accurate financial records and get ready for a tax audit.
- Chart Your Accounts Accurately
Charting your accounts is pivotal to maintaining accurate records. Each account reflects what your business spends or receives. While every accounting software comes with preset accounts, you should adjust them to how you run your business.
Sales, purchases, inventory, payroll expenses are some of the basic accounts you may use. You should consider creating sub-accounts to track every transaction.
- Generate Financial Statements
You may think generating financial statements at the end of the year is enough to keep an eye on your business financials. However, you should generate these financial records often to stay on top of the health of your business.
It’s recommended to generate these reports on a quarterly, monthly, and yearly basis. If you’re having trouble understanding these statements, you should consult an accounting expert to gain insight into the financial health of your business.
- Maintain Separate Business and Personal Accounts
If you’re just getting started, you may think it’s too soon to open a business account. However, keeping your personal and business accounts separate is important to maintain organized and accurate financial records.
When you commingle your personal and business funds, you expose yourself to tax audits. These audits can turn into a costly nightmare.
- Use the Right Accounting Software
Most business owners think a notebook is the best way to maintain their accounting records, but that’s far from the truth. Today, you can find great software that makes accounting easy.
An example is how Quickbooks Desktop offers features for tasks such as running your payroll, generating reports, and advanced inventory. Keep in mind software features will vary depending on the version you choose.
Can You Keep and Maintain Your Business Accounting Records?
While it may be intimidating to keep and maintain your business accounting records, you can do it yourself. The key to taking care of your accounting duties is developing a system tailored to your business. Focus on how you run your business and the best way to record every transaction.
Organizing your financial records will help you obtain an accurate picture of your business financials. You’ll also need this information to complete your tax returns and even request financing. You may think it’s far from the truth, but your business financials are vital to scale your business and take it to the next level.
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