Among handling all your other responsibilities, managing your small business’s finances can seem overwhelming. Unfortunately, being organised in this field is something you’ll need to master in order to achieve long-term success. The good news is that it’s easily achievable if you follow a few basic accounting practices:
Separate Personal and Business Finances
One of the simplest ways to streamline accounting is to create separate accounts for your personal and business expenses. You might need to open a dedicated business bank account and apply for a business credit card if necessary. Separating these two accounts benefits your business in a litany of ways:
- It makes tracking business income and expenses easier
- It minimises error
- It simplifies tax reporting
- It establishes a clearer picture of your business’s actual performance
Use Accounting Software
From Xero and MYOB to QuickBooks, investing in reliable accounting software is invaluable for business owners. Modern software solutions help:
- Automate tasks
- Generate invoices
- Track expenses
- Produce financial statements with ease
- Access real-time financial insights
If you’re used to doing these activities by hand, making the shift will also help reduce manual errors – this can be crucial regarding tax compliance.
Track Expenses and Income Regularly
Try to set aside time either weekly or monthly to input all expenses and income into your accounting system. It helps if you categorise each transaction correctly to give you a clearer idea of where your money is going.
Keep these records updated consistently so that you have more accurate insights and won’t be backlogged when tax season arrives.
Maintain Accurate Records for Deductions
Keep detailed records of any tax-deductible expenses. These could be:
- Office supplies
- Travel
- Professional services
You’ll need to document these expenses properly in case of potential audits and to save yourself time during tax season. This means keeping receipts or invoices – make good use of cloud storage or digital folders for this so you’re better organised.
Set Reminders for Important Deadlines
Missing tax filing deadlines leads to unnecessary penalties, so ensure you’ve set reminders for crucial dates. For instance, this could include quarterly tax payments or annual submissions. Most accounting software programs can help you track these dates and even send reminders, so this shouldn’t be too difficult of a process.
Review Financial Reports Regularly
Monthly or quarterly reviews of your business’s financial statements give you a better gauge of your overall financial health. This could include:
- Profit-loss statements
- Balance sheets
- Cash flow reports
Work with Glance Consultants
Your accounting needs will likely become increasingly complex as your business grows, so you’re best off partnering with Glance Consultants to keep your finances in check. Our team of chartered accountants and expert bookkeepers can help with the following:
- Offer insights
- Assist with tax planning
- Ensure tax compliance
So, if you’d like to know more about the accounting and bookkeeping services our team at Glance Consultants can provide your business, make sure you get in touch today for a chat.
