5 Useful Accounting Tips for Small Businesses

When running a small business, you have to make sure you stay focused on accounting. If you don’t manage debt, receivables, and marketing expenses accurately, your company will sink before it grows.

You can save your company by implementing simple bookkeeping strategies. Here are five accounting tips to help grow your business.

1. Decide on using a bookkeeper or accounting software.

Though entrepreneurs might feel ready to act as head of accounting, sales, and marketing at the same time to cut costs, it may help to hire a bookkeeper just to make sure you aren’t racking up the errors. It can help you to know someone with experience and deeper understanding is working on your books. To start, you can hire someone part-time or as a freelancer, so you’re not paying a full time wage for these services. As an alternative, the U.S. Small Business Administration offers help with managing expenses on your own, or use one of the best accounting programs which will lets you crunch the numbers yourself.

2. Keep accounts receivable payments separate from borrowed funds.

Small business owners need financial backing and/or loans for startup capital, marketing campaigns, and other initial things in the early days. To make sure the loans don’t appear in the receivables, use software that separates income from borrowed funds. Don’t lose sight of what is yours and what needs paying back.

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3. Don’t allow clients to get away with not paying balances.

Seeing a large amount in the receivables column is a good thing, but the money doesn’t really count until it is in your bank account. Don’t let clients avoid regular payments. Stand firm and insist you receive payment for past orders before letting them have more materials or services. The receivables department is crucial in keeping your company afloat. It may make sense to improve your invoices or to update your billing and invoicing software.

4. Detail daily expenses so you can budget for the coming weeks.

It’s a good idea for business owners to keep records of everyday expenses they incur in the company. Instead of calculating expenses every two weeks for payroll purposes, focus on every day or every week. This can help you have a better idea of where finances are each week and how much money you’ll need to budget for in the upcoming weeks.

5. Calculate a minimum monthly profit.

When planning how much it takes to keep a small business running, the numbers can get complicated. Devise an accurate system of expenses and regular obligations so you know exactly the minimum income you need every month. Because income can be the easiest to calculate, make a strict target you’ll need to earn. Without that exactitude, accounting becomes confusing and your business can suffer.

Accounting is as important your first week in business as it is during tax filing time. Use these five accounting tips to keep your business’s finances healthy and stable every day of operation.

  • Kyle Wayne

    It’s great that you talked about not letting clients avoid regular payments. If my dad were a business owner looking to hire a bookkeeping service I think he would find great value in your tips. I’ll be sure to talk to him about hiring a professional who will stay on tops of clients if he is ever in need. http://www.markburch.com/bookkeeping

  • Sheldon Frank

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  • Katerine Bauer

    I love that tip about accounting for every expense as to plan for future ones! That is really smart, especially if you are working with a small budget. Do you have any more tips about looking for a small business accountant? http://www.kampba.com.au/our-services/

  • Glory

    I know that the most successfull idea for the small business is to open your own website and sell there old stuff. I am going to do this with https://weblium.com . These guys do the best websites and know what kind of the website you need.

  • Iaroslava Nevmerzhytskaia

    thanks for article! Good job

  • http://mseedsystems.com Mark Justine

    This is one of the best accounting tips I was read this article can help enhance your accounting career. if you are looking an accounting software check this SAP Philippines and SAP Hong Kong.

  • Michael Lee

    At work, we are are thinking of ways to start saving more time on accounting. One of the options we have discussed is to outsource our accounting or to get accounting software. I also like your tip to calculate the minimum monthly profit that you will receive. http://www.rcbs.ca/services/

  • http://sapphilippines.mseedsystems.com Andy Magundayao

    One of the best accounting tips I ever read. If you are looking for an accounting software, check SAP Philippines .

  • John Simon

    Good article.
    I’m thinking to start my own business with website.I can not decide on the choice of service provider to website builder.Couple of my partners recommend me a weblium – https://weblium.com/ source.Someone try it they service?