Business & Finance Finance

Accounting Tips For Small Businesses

When they begin running a small business of their own, most entrepreneurs think they have a clear outline of their operations. However, as time passes by, there seem to be so many things to do and so little time to do it in that you tend to focus on those that require immediate attention. Financial accounting is an important task but most business owners may not have the resources to meticulously track their income and expenditure on a day to day basis. However, this may prove to be an expensive mistake because lack of records can lead to confusion about the financial status at a later date. Besides, the law also requires business owners to have their financial information readily available at all times. Here are a few accounting tips to help you keep you do this.

Be Systematic in Documentation:

Maintain a book for recording your daily sales and a deposit book to keep track of the sales deposits. Ensure you make the relevant entries on a daily basis or you may forget to log important information, resulting in financial discrepancies that are hard to explain. Having such a system also helps to some extent to protect your business from theft by employees. Similarly, maintain a file of receipts for all the items you purchase and use the information from here to record your expenses. The immediate value of this may not be obvious but come auditing time, having incomplete or no financial records may cause you to lose much more than your sleep.

Hire an Accountant:

As a small business, your financial records will include a minimum documentation of sales, receipts, invoices, bank statements and payroll statements. Besides, there is also the additional work of calculating taxes and entitlements and arranging for the regular payment of these. Allot this work to an in-house employee with expertise in accounting or better still, hire a qualified accountant in Vancouver to help manage this aspect of your business.

Keep Business Accounts Separate:
Make sure you have a unique business account that you use only for your business expenditure. Your personal expenses should not appear in your business account statements. The best way to ensure this is to also have a credit card exclusively for spending on your business purchases. This is important because you cannot afford to have things like your home grocery expense figuring in your business expenditures. Whatever the emergency, make it a point to never ever make a personal purchase with your business credit card.

As your business expands, you may find that accounting and bookkeeping takes up a significant amount of your time. Although you may have entrusted the task to one of your existing employees, it may still be a drain on your resources because it means you cannot use that employee to help with other aspects of your business. Therefore, it makes perfect sense to outsource your financial accounting to an expert accountant in Vancouver who has not just specialized knowledge but also several years of experience with business accounting.

Leave a reply