If you run or own a business, it is important to stay on top of your expenses, sales and income. This helps you know how the company is performing and meet the tax report requirements. Most businesses choose to seek accounting services to manage all these tasks. But, it's still essential for company owners and managers to know some essential commercial accounting tips and tricks. Consider the following pointers if you want to set your company up for success.
Organise the financial data
The first and most significant step when it comes to measuring company results is organising the financial data. You may choose to design an effective filing system, with paper folders or electronically. The information should be catalogued in a special way that makes it easy for anyone to understand it — it could be by product, time period or customer. The aim is to have back up that can be used when compiling financial reports.
Pay the bills on time
Every company incurs expenses, be it the utility bills or with suppliers. It's essential to know what's due and when so you can make your payments on time. Other than saving your company money by avoiding interest, fines and late fees, you will forge a healthy relationship with your suppliers and other stakeholders. For this reason, consider budgeting appropriately, then draft a payment calendar and stick to the set payment schedules. In some cases, paying bills on time or earlier attracts discounts — it's essential to take advantage of such opportunities.
Don't mix personal and business expenses
Your business is a separate entity from you (the owner), so be sure to run it separately. Business expenses should be detached from personal ones. Consider opening a dedicated bank account for your company and use it for savings and expenses. The same should be done for your personal matters. If you've decided to contribute some funds to the business out of your account, be sure to document the transaction. A business credit card is also important as it will reduce your legal exposure to debts, particularly if you own a corporation or limited liability company.
Use accounting software
Accounting programs have become crucial tools for most companies, particularly small businesses. They make it easier for company owners to boost their efficiency in recordkeeping. Most of the accounting programs the market offers today can be linked to a credit card or bank account. Then, the software will track the expenditures and income and categorise them, let you pay invoices and create reports.
Contact a business accountant like Marisa Gonzalez for more information.Share