Small business owners are often responsible for a wide variety of tasks, and it can be overwhelming to manage so many different aspects of your company. Accounting is a perfect example, as small businesses face a number of challenges and owners don’t always have accounting experience.
This article will cover some of the best ways for small business owners to improve their approach to accounting and ensure accurate books for financial reports and tax season. Keep in mind that your accounting needs will change as your business grows—it’s critical to consistently evaluate your strategies in order to find room for improvement.
Consider Outsourcing
Outsourcing isn’t always the best tactic for accounting, but it can be a good way to delegate these tasks if you aren’t confident in your accounting abilities and don’t have enough extra cash to hire a full-time employee. Fortunately, it’s easy to find bookkeepers and accountants who work as contractors or freelancers and are willing to take on individual projects.
In addition to getting the job done at a lower cost, a professional accountant will likely be able to manage your cash in ways that save you time and money. This is the simplest option if you feel like you’re in over your head when you try to manage your company’s books.
Use Accounting Software
Just as you can find reliable freelance bookkeepers, you can also take advantage of accounting software to streamline key tasks and help you stay on top of your books. With so many high-quality options available, you should have no trouble finding an application that fits your needs.
Accounting platforms generally let you run your own books or entrust them to an outside accountant or bookkeeper, and most are compatible with credit cards and bank accounts. You should be able to set them up to automatically import and track expenses, generate financial reports, and more.
Create a Business Bank Account
One of the most common mistakes among small business owners is making personal and business transactions on the same account. This makes it unnecessarily difficult to track expenses and determine which costs are related to your company.
With a business bank account, you’ll be able to view all financial information from a single location. You can also accept payments directly into your business account. Furthermore, these accounts come with additional protections along with lines of credit if you need short-term cash flow.
You may not know where to start when it comes to small business accounting, but this task can be made more manageable if you follow these tips and keep accurate records of all transactions. Over time, you’ll grow accustomed to the process of managing your company’s books and start feeling more confident in your own accounting skills and knowledge.
Rae is a graduate of Tufts University with a combined International Relations and Chinese degree. After spending time living and working abroad in China, she returned to NYC to pursue her career and continue curating quality content. Rae is passionate about travel, food, and writing for Funding Circle.
