Four Small Business Accounting Items You Need to Know

February 8, 2020 | Article

Being a small business owner can be tough. You have a lot on your plate to handle, and sometimes it can seem downright overwhelming. From keeping up with the competition to making sure your employees are satisfied, being a small business owner always keeps you busy.

Amid all this, it’s important to ensure you’re not neglecting parts of your business. One area is your accounting and finance functions. Accounting is a necessary, though sometimes daunting, part of your small business. It’s also incredibly important and vital to the health and well-being of your small business.

Here are a few tasks you should stick to related to your small business accounting:

  1. Stay away from the back burner.
    As a small business owner, you’re busy and have a million thoughts running through your head, it’s easy to look at something and think, “I’ll take care of it later”. But by working on it immediately, you can save time and prevent potential risk.

    When it comes to invoicing, send the invoice right away. Better yet, add a process to automate invoices being sent right away. This will get the bill to the client quicker, which can in turn lead to you getting paid quicker, and who doesn’t want that? This reduces the risk of you forgetting to send it altogether, and can lead to improved customer satisfaction by being on the ball.

    When you receive this payment, deposit it right away, rather than letting it sit around and risk it getting lost or even stolen. Another option is to consider receiving electronic payments. If your business has inventory, enter it into your accounting system the day you receive it. This will give you, as a small business owner, a clearer picture of what you have on hand. It will also keep your accounting systems up to date.

    If you’re going to procrastinate in your small business, know the repercussions for doing so. Understand the impact and be willing to accept the consequences for not catching up on inventory or reconciling daily, rather than simply ignoring it.

  2. Want to learn more about inventory management?

    Check out our inventory management video
  3. Keep your eyes open
    Small business accounting includes a lot of financial statements, including balance sheets, income statements, etc. Likely you have an accountant who is helping you maintain these records and keeping track of what is going on with your financials. But, you can also do monitoring yourself. Occasionally viewing other financial statements allows for more eyes to be on the lookout for any issues and red flags that may arise.

    Start by reviewing your cash flows weekly. Your cash flow can tell you the money that is coming and going from your business during the week, and this can give you a good picture of where you’re standing. You can also ensure your cash is reconciled daily against your receipts. This will not only help you find issues as a small business owner, but also protect against potential theft and fraud. At the very least, it will allow you to detect it earlier rather than later.

  4. Prepare for year-end all year-long
    Small business accounting never sleeps. So even though it’s not technically year-end, taxes and other year-end planning items need to be looked at throughout the year, not just when the calendar flips to December. Steps you can take as a small business owner include: filling out forms, making tax payments, ensuring correct classification of workers or just keeping note of what you may need to change when you file your year-end taxes. Being alert and aware of what’s going on in your small business throughout the year can lead to less surprises come year-end planning time.

  5. Want to know what to expect or things to consider at year-end?

    Check out our year-end planning page
  6. Keep in touch
    While looking over your small business accounting, remember to keep your business advisor or accountant in the loop. Not only will it make their job a little easier, they’ll also be able to provide helpful feedback and answers so you can make smart, informed business decisions.

One Thing You Want Small Business Owners to Know

Small Business Accounting Affects All You Do
Running a business can be a challenge, and not monitoring your financials and balance sheets can make it more difficult than it really needs to be. By keeping up with these simple tasks, you can put you and your business in a better position and get back to working on what really matters – the success of your business.

Need help setting up your system or figuring out more small business accounting tasks? Just ask.

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