As a small business or start-up, getting your accounting in order can be hard work. It’s an entire job in itself, so having to do it alongside running your business isn’t easy. Nonetheless, there are a few things you can do to lighten your load both now and in time for the end of the business year.
Our 5 step guide will take you through what you can do to make accounting for your small business a whole lot easier.
Keep Things Separate
It seems pretty simple but it’s still surprising how many people don’t do it correctly. Keeping your personal and business finances separated is so important, even if you are registered as a sole trader, rather than a limited company. To make this easier, set up a business bank account that is used entirely for your payments and expenses. Then, when it’s time to fill in your tax return, you’ll have an easy time tracking your money.
Remember: Never ever use your business bank account for personal transactions. Even if you pay yourself back, you’ll have to record it in your accounting and it will cause all sorts of issues later down the line.
Set Aside Dedicated Time
Separating your finances is a good start but once you’ve done this, you should still set aside time to go over your expenses and invoices each week. Even if it’s only 15 minutes on a Friday afternoon, taking the time to go over everything whilst it’s still fresh in your mind will make things easier for you in the long run.
Track Your Most Expensive Costs
For most businesses, their biggest cost is labour. However, it’s not the same for everyone and keeping track of your most hefty costs could help you to find extra money, which could be used elsewhere. Taking the time to do this could also expose areas where you are overspending and can help you to cut back on unnecessary expenditure before it’s too late.
Make Sure You’re Being Paid
Small businesses are one of the biggest offenders when it comes to not chasing up invoices and it can severely damage their business. A company’s most precious tool is a steady flow of income, cut this off and you begin to see problems almost immediately.
Employees can’t be paid, bills for product parts start piling up, you start having to borrow more money to keep up with it all – it’s a familiar story all across the country but one that can be avoided simply by pushing clients for payment when it’s due.
Get Some Help
Finally, if you want to make sure your accounting is always in order then you might benefit from some professional help. Whilst most small businesses probably aren’t going to have the money for a specialist accountant, there are alternatives such as online accounting software, which can be utilised for a fraction of the price.
Accounting software helps you to organise your accounts more clearly, as well as allowing you to send, track and push invoices for multiple clients. Whilst it might not be as glamorous as your own personal accountant, it’s certainly the next best thing and could save you a lot of time and stress.