Business News – If you own a small business, chances are it’s your entire livelihood. You’ve likely poured lots of blood (maybe), sweat, and money into getting it up and running and making a profit. With that in mind, how well are all your internal systems set up? Is it a struggle every day to make sure everything is running as it should be? Are you constantly scrambling to make sure bills are paid or money is where it needs to be to get the next shipment of product? And if you haven’t started a business yet and would like to, but you’re concerned about these sorts of things, you need to continue reading.
While streamlining a solid bookkeeping and accounting system won’t solve all your business’s potential problems, it can help immensely with allowing you to be prepared for dealing with any issues that may crop up. So, with that said, here are some top tips for making sure your small business’s accounting and bookkeeping systems are functioning at peak efficiency.
You’ve probably heard this one before, and regardless of whether your personal life is very organized or not, you absolutely need to get your business’s accounting system organized, among other aspects.
There are a number of different ways you can go about making sure your accounting system is organized, but one of the most effective is to make sure all your business’s financial transactions are recorded in separate accounts and ledgers according to what type of transaction they are. For instance, the list provided by Score discusses the top ten most commonly used bookkeeping accounts, including Payroll Expenses, Loans Payable, Accounts Payable, and Inventory. Each of these accounts is dedicated to recording a specific kind of transaction, like how Accounts Payable is where all the information about your business’s bills is recorded while Inventory tracks all stock levels and financial information about what products you have in stock.
Plan for Unforeseen Consequences
While you definitely want to keep a close eye on all your business’s financial transactions by tracking everything carefully, you also want to have a plan for when unexpected problems or expenses come up. While setting up a fallback fund for unforeseen emergencies is definitely a good idea, it isn’t the only thing you should do. Entrepreneur suggests looking ahead to major expenses like a computer upgrade or location renovation and then beginning to plan and save for that expense well in advance. A year in advance may seem like a lot, but beginning to plan and save for those expenses multiple years in advance is highly recommended.
Additionally, you’ll want to plan and schedule expenses in accordance with the seasonal ups and downs. Depending on the exact nature of your business, those ups and downs may differ from other businesses, but the fact is that there will be busy and slow times throughout the year that come on a decently regular schedule.
Get Solid Software Systems
You can certainly deal with all your bookkeeping and accounting requirements with a good old fashioned pen and paper, but good luck with doing so with any modicum of speed and good accuracy. If you don’t already use some form of software assistance, for either your business or personal finances, now is definitely the time to get a hold of one. American Express discusses how very small businesses can probably get away with just using a regular Microsoft Excel spreadsheet (or Mac alternative). But if you have any intention of growing and expanding your business, you either need to get a hold of more intricate software now, or prepare to get some in the future.
There are a number of choices available to you, from those that can deal with the barest accounting basics to others that offer all the bells and whistles. Quicken, Quickbooks, Sage 50, and plenty of other options are out there. You’ll need to spend some time reading online resources like this one from Shopify and researching each option to find the right one for you and your business.
Consider Professional Assistance
Finally, you shouldn’t feel bad if dealing with all the intricacies of business bookkeeping and accounting begins to go over your head. Turning to professional assistance isn’t a bad thing, and in many cases it can be hugely helpful. The US Small Business Administration discusses a couple different levels of assistance you can look into based on the size and future prospects of your business. You can get yourself a simple assistant to help you with the basics, or you can look into hiring a dedicated accountant and bookkeeper, or you can look into outsourcing to an accounting company or hiring a full or part-time CFO (Chief Financial Officer). While it’ll cost more to get the services of a full-time CFO or company, doing so will also give you a valuable resource in the form of advice and assistance in planning out your business’s path forward.