As an entrepreneur, your books are the scorecard of the business financial health. Let’s get one thing right before we dig into it; you’re solely responsible for keeping accurate and up-to-date records.
Why is this important? The failure to focus on your business records will lead to its death. Look, if your business isn’t profitable, it’s only your book that will reveal this.
Yea, we know that bookkeeping isn’t the favorite task of most small business owners. However, by adopting the proper accounting practices, you can keep your business alive and let it thrive. To achieve this, here are a few lessons to straighten you up;
1. Business and Personal Finance Separate
It’s usually at this point that most business owners get it wrong. Why will you want your statements mangled up with a lot of expenses and income across multiple accounts?
We are talking about a nightmare that will eventually happen. All of these could have been avoided by setting up a business account. Keep a separate credit card for your business also.
2. Keep All Your Business Records
Consider it a high priority to document all of your business transactions. We are referring to your receipts, invoices, wage receipts, and many more.
You need to go from a box or trolley full of random papers to developing a filing system. With this, you’ll know where to find what.
3. Start Preparing For The Tax Season Early
Please don’t wait till it's late before getting prepared for the tax season. While you are trying to run your business on a day-to-day basis, you’ll be surprised to know that the tax season has caught up with you.
Set deadlines for when you want to get your tax done and note it in a digital calendar. You need to avoid deadline-related penalties for the sake of your business profitability.
4. Automate Your Business
There’s a lot you’ll have going at the same time as a small business owner; that’s why you need to put in place automated processes. One of the vital aspects to be automated will be your accounting.
You need to give your business all the time it can get. As a business owner, you need to leverage automation tools.
5. Plan Ahead For Major Expenses
You won’t want to make a purchase that leaves a big hole in your finances. Take a look at your business and identify the significant investments likely to come up between 1 to 5 years.
Factor in the seasonal ups and downs into your finances; this will help you know when to expect surplus and when there will be a market downturn.
6. Seek Experts Opinion
While you may not have the resources to engage the services of an expert accountant, there will be moments where their expertise and experience will be needed.
When that time comes, don’t hesitate to do so. Outsourcing your bookkeeping is cost-effective, and you are assured of impeccable accuracy.