Business owners have to take great care of their finances if they want to see their ventures get ahead of the curve. Since the key feature of well-maintained finances is detailed accounting, this area deserves special attention of every entrepreneur. Therefore, we’ve prepared five crucial guidelines for smooth accounting in Canada (or wherever you’re based) that will be useful for business owners working in different niches. You need to work together with your accountant(s) to establish a profitable business.
Work with trustworthy accountants;
A trustworthy accountant is the pillar of every business. This person will know everything about every single transaction you make. What’s more, they’ll have a huge influence on your decisions and investments. So, when you’re hiring an accountant, you’re also looking for a close ally and a counsellor – something like Tom Hagen in The Godfather. The first thing you should do is list a number of tasks your accountant will be doing in your enterprise. After that, check the portfolio of every candidate that looks suitable for the position. Also, feel free to contact their previous employers and find out more about your potential accountants straight from the horse’s mouth.
Calculate your survival income;
Even if you have a substantial number of clients, you should calculate what net income keeps your business above the surface. Include all the overhead expenses, workers’ payments and taxes in that calculation. Make sure that you add your basic investments to this formula, as well. Such a proactive approach to budgeting will help you set more tangible goals. Moreover, if your accountant and your project manager work together on these calculations, the latter will know how to choose the right projects to ensure the desired income.
Separate private and business funds;
Keeping your private money separate from your business assets is one of the key prerequisites of proper accounting. Therefore, opening a business bank account is the first thing you should do when you’re launching a business. On the one hand, you’ll get a better insight in your business finances. Also, it will be easier to claim tax deductions when you have a separate business account. On the other, your personal assets won’t interfere with your business funds. In return, it will be easier to plan your home budget and private expenses.
Accelerate work with software;
Just like many other fields of work, accounting is also undergoing some serious changes due to tech improvements. In line with that, today it’s difficult to imagine a business owner or a professional bookkeeper who doesn’t use accounting software tools. In these modern times, it’s crucial to speed up accounting services. In line with that, every business should use a simple invoice creator and other software accounting features, to ensure automatic and fast invoicing. For instance, if your run an e-store that becomes popular overnight, these elements like accounting software India will help you provide services for more customers per unit of time.
Take it easy on cash;
In this day and age, it’s easier to track your business expenses if you make your payments with bank cards. If you pay in cash, you might lose track of some of these expenses. As a result, they won’t appear on your balance sheet, leading to inaccurate accounting records. On the other hand, paying with bank cards or via e-banking services ensures that every single transaction is properly registered in your books. So, set clear business plans and let bookkeeping professionals help you achieve them.
AuthorBio: Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.