Few things can make a small business owner cringe like the mere mention of business accounting. The best part is when the checks come in, but the worst part is managing the rest of it when it comes to accounting.
Here are 5 tips to make it a little easier on you:
1. Open a separate banking account (along with checking and credit cards) for your business expenses. Keep in mind the interest you pay on business credit cards or loans is tax-deductible. Plus having separate accounts makes record keeping a bit easier.
2. Determine a reliable way to collect on your invoices. It won’t do to have clients owing you money on a regular basis, and that will affect your ability to pay your own bills.
3. Forbes Magazine (https://www.forbes.com/sites/theyec/2012/10/24/5-simple-tips-to-keep-your-small-business-finances-in-order/#6a0f370535bd) recommends setting aside around 15 minutes a week, no matter what, to put your finances in order. That way when tax season comes around you’ll be pleasantly surprised by how organized everything is.
4. Don’t forget to keep those receipts and avoid paying cash when possible. You want to keep as accurate a paper trail on your expenditures as possible. When it comes to being able to deduct them, you’ll be happy you did.
5. Hire an experienced accounting firm to help you with payroll, bookkeeping, tax preparation, budgeting, cash flow management, and so on (depending on the size of your business). You’ll find that what you spend on an expert, to manage this part of your business, will more than pay off in the long run. It frees you up to do what you do best – growing and running your business.