10 Accounting Tips for Business Owners | Salellas Strategic Bookkeeping | Small Business Accounting

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10 Accounting Tips for Business Owners

1. Keep your receipts: Right from the beginning, you should establish a system for organizing receipts and other important records. This process can be simple and old school (bring on the FiloFax), or you can use a service like ShoeBoxed. For American store owners, the IRS doesn’t require you to keep receipts for expenses under $75.00, but it’s a good habit nonetheless.

2. Track your expenses: The foundation of solid business record keeping is learning to track your expenses effectively. It’s a crucial step that allows you to monitor the growth of your business, build financial statements, keep track of deductible expenses, prepare tax returns, and support what you report on your tax return.

3. Don’t mix business & personal transactions: Start by opening up a business checking account, and then any savings accounts that will help you organize funds and plan for taxes. For instance, set up a savings account and squirrel away a percentage of each payment as your self-employed tax withholding. Next you’ll want to consider a business credit card to start building business credit. Corporations and LLCs are required to use a separate credit card to avoid commingling personal and business assets.

4. Open a business bank account: After you’ve legally registered your business, you’ll need somewhere to stash your business income. Having a separate bank account keeps records distinct and will make life easier come tax time. Note that LLCs, partnerships, and corporations are legally required to have a separate bank account for business. Sole proprietors don’t legally need a separate account, but it’s definitely recommended.

5. Make sure to pay yourself: With Bookkeeping you will know better how much you can pay yourself. Very important.

6. Incorporate your business: Trying to avoid legal mumbo-jumbo. Deciding between an LLC and an S corporation or whether to be a sole proprietor or incorporate isn’t easy. However, these choices affect everything from the amount of taxes you pay to the investors you can solicit. Avoid this common small business mistake and be sure to trademark your business name and logo as well, or you could find someone else stealing the brand you worked hard to build. Self-help sites like RocketLawyer, Nolo.com and The Company Corporation can get you started; consult an attorney for more help. The more research you do on this subject, the better.

7. Delegate for efficiency: If you have accounting experience you can do this in an Excel spreadsheet, but most small business owners use accounting software, such as Quickbooks or Freshbooks, or they hire a bookkeeper.

8. Monitor your cash flow: Cash flow isn’t sexy, and who wants to look at Excel spreadsheets when they could be doing the fun stuff? Unfortunately, not paying attention can be one of the most serious mistakes you make, and you’ll inevitably discover that there’s more cash flowing out than in. There is no excuse for not staying on top of your small business finances when accounting programs like QuickBooks make it easy to generate at-a-glance snapshots of your business. Not managing cash flow properly is one of the most common small business mistakes–and also one of the most hurtful.

9. Focus on making money: Putting a bookkeeper on your books can free up your time so you can do what you know best: make money for the business.

10. Finish things: Eliminate things when possible, even business relationships if needed. This will remove spending time thinking about things and the potential outcomes than actually acting on them.

Hire a bookkeeper. Free up your time. Grow your business.
Www.salellasbookkeeping.com

Comments

John Lee says:

Every business needs a good accounting system for the survival of the business. Check this SAP Philippines.

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