Did you know that nearly half of all new small businesses don’t survive the first five years?
Many of these businesses might have lasted longer if their accounting practices were more solid.
Accounting is essential for any business, but small businesses, in particular, benefit from having an accurate picture of their finances to make intelligent decisions. If accounting isn’t your strong point, keep reading to learn our top five small business accounting tips.
1. Keep Business and Personal Separate
Accounting for businesses needs to be kept separate from accounting for your personal life.
Setting up a completely separate bank account for your business is the easiest way to keep things separate without getting confused. Keeping things separated also helps limit your liability if your business is registered as an LLC or corporation.
2. Develop a Budget
Tracking revenue versus expenses will never give you an accurate picture of how your business is doing if you don’t establish a budget.
It might seem like things are going well if you only look at these two figures when in reality, you could be far off from your projections or not making enough to cover a significant expense coming up.
3. Work With a Professional
One of the best bookkeeping tips you’ll get is hiring accounting services, even if you have a background in accounting yourself.
You’ll have many other tasks to focus on, and being too involved in the numbers side can stress you out.
Working with a virtual eCommerce accounting company can help you make wise financial decisions and take some of the burdens off you. Take a look at esenshi.com to see a great option to consider.
4. Stick to Tax Deadlines
Be sure to make a note to remind yourself about any upcoming tax deadlines, so you’re prepared.
Scrambling at the last minute to get everything together can cause unnecessary stress for you and your accountant. Keeping meticulous records throughout the year will help you when this time comes around.
5. Keep All Your Receipts
The IRS requires receipts for any tax deductions. So it’s better to keep a receipt and not need it than to get rid of it and wish you hadn’t.
Creating a filing system of some sort will keep things in order and make it easier to keep track of spending throughout the year.
One option is to file them digitally, so you don’t have paper receipts to deal with or worry about losing.
Follow These Small Business Accounting Tips
Running a small business is hard, especially when it comes to the financial side of things. But, if you follow the five small business accounting tips found here, you’re starting your accounting off on the right foot.
Careful accounting just might help you beat out the other businesses and stay open for many years to come!
If you found this helpful and want to read more business tips, tricks, and advice, please take a look around the rest of our site for more!