4 Tips For Small Business Owners' Accounting
Posted by: Brookside Admin
As a small business owner, your ability to get a handle on your accounting department is vital to your company's success. Effectively managing your finances allows you to cut costs intelligently and accurately track profits. The downside is that it requires valuable time to do so. If you don't want to task yourself with your own accounting, give us a call at Brown Kinion and Company and we'll discuss a plan that allows you to put your books in the hands of professionals. If you want to handle your finances yourself, be sure to follow these tips passed on by Kirk Simpson at Forbes.
- Business expenses
Your professional life and your personal life have a way of intertwining. That's probably unavoidable, but you can keep your business accounts separate from your personal accounts. If you have a credit card for your business, only use it for your business. That will make it easier to track your monthly expenditures and easier to quickly deciper where you stand at a given moment. You'll save yourself a lot of time and stress by ensuring everything on your business statements is actually related to your business.
- Schedule time
As mentioned, acting as your own accountant requires time. That may be time in a day that you don't have. In order to be sure you actually get around to managing the books, put that time on your calendar. You'll need a minimum of 15-minutes each week to organize your finances and likely a longer session once per month to handle payroll and run more in-depth reports. The key is to use that time as you would any important meeting. Put aside any distractions and truly concentrate on the task at hand.
- Cost of labor
Regardless of how big your staff is, it's important to completely track the cost of labor, which includes wages, benefits, overtime and even expenses like office supplies and computers required for each individual. Even if you're the only one on staff, track your own expenses. This way, you'll know when you're able to hire more help, give raises or scale back before money becomes too tight.
- Invoices and payments
The only way for your business to make money and remain in business is to receive payment for your services, obviously. A common mistake, however, is failing to adequately put enough focus on this area. You likely can't afford to carry a debt for months so you need to have a system in place to track each invoice and easily be able to tell when one is overdue. This will also let you know which customers are difficult to get payments from and you may want to avoid in the future.
These are basic tips that many small business owners learn after starting their own company. For more advice or to have your finances over to the experts, give us a call.