As a small business owner, you’ll likely wear many different hats and have a lot of challenging responsibilities. You may currently be looking to hire a commercial cleaner or need help with your bookkeeping. Bookkeeping can seem like a daunting task, but it’s essential for the health of your business. In this article, we’ll discuss 8 useful tips for small business owners who are looking to get their finances in order.
- Consider Outsourcing
Outsourcing is the process of hiring a third party to handle business functions or processes that are typically performed by in-house staff. There are many benefits of outsourcing, including:
- freeing up your time
- reducing labor costs
- gaining access to expert knowledge, skills and technology
- increasing efficiency and productivity
- improving customer service
- reducing stress levels
If you’re currently thinking of outsourcing your bookkeeping needs, be sure to do your research and choose a reputable, reliable provider. The popularity of Bench online bookkeeping shows how keen business owners are to outsource their accounting and financial reporting using top-rated platforms. They want to access dedicated bookkeepers and receive help with their monthly financial statements and tax preparation and filing.
- Use Technology
These days, there are many great bookkeeping software options available that can make your life much easier. Using such technology for your bookkeeping needs has numerous advantages, including:
- reducing data entry errors
- automating repetitive tasks
- providing real-time visibility into your finances
- simplifying the tax season
- saving time and money
When choosing bookkeeping software, be sure to select a program that is user-friendly and that offers features that’ll meet the specific needs of your business. Some major examples include Freshbooks, Zohobooks, Quickbooks, Freeagent and Kashoo.
- Hire an Accountant
If you don’t feel comfortable handling your own bookkeeping – or if you simply don’t have the time – another option is to hire an accountant. Working with one has many advantages, including:
- having someone to answer your questions and provide guidance
- gaining access to expert knowledge
- knowing your tax submissions will be both accurate and on-time
- having peace of mind that your business won’t be penalized or shut down by the IRS
- freeing you to focus on growing your business
When hiring an accountant, be sure to choose someone who is qualified and who you feel comfortable working with. Check their online reviews before deciding, and ask for recommendations from other small business owners.
- Involve A Financial Advisor
If you’re not sure where to start when it comes to bookkeeping, involving a financial advisor can be a helpful first step. They can help you understand what needs to be tracked and why it’s important. A financial advisor can also offer guidance on what software or tools you need to get started.
A financial advisor can offer advice on how to save, invest, and spend your money. They can help you create a budget and make sure that you fully understand and manage your taxes effectively.
- Track Your Finances And Organize Your Records
Tracking your income and expenses is vital if you want to ensure that your small business is running smoothly and profitably. You can do this yourself by recording all business transactions in a journal, ledger or basic spreadsheet. Alternatively, you can use one of the various bookkeeping software programs we discussed earlier.
Organizing your records will help you to keep track of your finances, prepare tax returns more easily and spot any potential problems early on. There are various ways to do this, with the most basic method being to create a folder for each financial year – and to store all relevant documents in it. This will also make it easier for accountants or auditors to find what they need when they need it.
- Create A Budget And Stick To It
A budget is a roadmap that tells you where your money is going. It shows you what you can and can’t afford, based on your income and expenses. A budget is essential for small business owners because it helps them make informed decisions about how to allocate their resources. Creating a budget may seem overwhelming, but there are many helpful resources available to get you started. The Small Business Administration has a great guide to creating a business budget and you can also find helpful templates online or in accounting software programs (like QuickBooks or FreshBooks).
Once you’ve created a budget, it’s important to track your income and expenses carefully (as stated earlier) and make adjustments if necessary. If you find that you’re consistently spending more than you planned, you may need to reevaluate your budget or find ways to increase your income.
- Separate Your Bank Accounts
The most important reason to keep your business and personal finances separate is to maintain control and visibility of your business expenses. This will give you a clear idea of how much money your business is making or losing each month. There are a few ways that you can achieve this:
- Get a business credit card: This will help you track business expenses separately from personal expenses.
- Set up a business bank account: This will allow you to deposit business earnings and pay for business expenses easily.
- Use accounting software.
- Stay On The Ball
Here are some final suggestions:
- Set aside time each week (or month) to review your finances and make any necessary changes
- Create invoices for all services or products you provide
- Make sure all your receipts are filed away neatly
- Reconcile your bank statements and credit card statements regularly
- Make sure you’re charging enough for your products or services
- Don’t forget to pay yourself
- Set aside money for taxes- you don’t want to be caught off guard when tax season comes around
- Stay up-to-date with the latest bookkeeping trends
If you consider these 8 major tips for your small business, you’ll be able to effectively perform your financial activities. Thanks to correct record keeping and professional assistance, you’ll be well placed to succeed in the marketplace. In turn, you’ll hopefully become an established company and one that’s destined for expansion.
