Keeping on top of your accounting is important for any business but particularly for small businesses. It’s vital for managing finances and staying on top of tax requirements. However, running a small business often means that your attention is drawn elsewhere and you might not be as on top of the finances as you would like to be. Here are some helpful tips to get you back on track:
- Track all expenses
To have a better idea of what you’re spending business money on, it’s important to keep track of every single expense and retain all receipts. This will make it easier and more efficient when it’s time to file your taxes and claim for small business deductions. An organised system is essential and if you need assistance, consider contacting Gloucester accountants like https://www.randall-payne.co.uk/services/accountancy/gloucester-accountants/
- Keep personal and business finance separate
By keeping these two separate, you’ll have a better idea of what is happening with your business. It also makes life easier come tax time and could help in keeping your business credit much healthier. Having a business account also adds legitimacy to your operations and looks more professional.
- Track all income
Just as you need to be tracking all of your outgoings, it’s necessary to track all of the income as well. This includes loans, cash injections from investors and of course, revenue from sales.
- Track staff costs
Keeping a close eye on payroll is important but it’s only part of the story. Everything spent on labour costs should be carefully logged and this could include any staff benefits, overtime and the cost of personal development and training, for example.
- Stay on top of accounts receivable
Sending out invoices is one thing but if you’re not chasing payments and keeping track of what’s received and when, you could be losing out not only in terms of paying higher taxes but in reducing essential cash flow for your business. Get stricter with chasing payments and you may need to do this multiple times.
- Plan ahead for big expenses
Having an emergency fund is crucial as there will always be big expenses that crop up such as upgrading equipment. If these can be planned for in advance and funds set aside, the company will be in a much stronger position financially.
- Make time for accounting
Set ahead time each week to get on top of finances. It’s too easy to think there is nothing that requires immediate attention but this is when things can get messy and out of hand. By setting aside some time each week, you’ll have a much better grasp of what’s going on.
- Set targets and goals
When you’re on top of your finances, you’ll have a clearer picture of where your company will be financially in the near future. Try to set realistic goals and targets that can be reached. If you find this tough, consider asking an accountant to help you with forecasting.