5 Simple Accounting Steps to Control Small Business Finances
It’s not unusual to fall behind with financial tasks in the midst of the hectic pace of running a small business. Not keeping perfect books doesn’t make you a bad business owner, but it can create problems when trying to complete tax forms or plan for future expenses. Regain control of your financial records with these simple guidelines.
Get and Stay Organized
You know the frustration of time wasted trying to find a receipt or bank statement that never made it to the filing cabinet. Instead of waiting until you need something to dig it out, use that time to tidy up your financial records. Locate your essential paperwork, record any unregistered transactions and file what needs to be filed. After everything is in place, you’ll always be able to find what you need, and you should only have to spend around 15 minutes a day maintaining order.
Embrace the Cloud
Integrated accounting software is becoming the norm for businesses of all sizes. Using an application instead of manual entry reduces errors and increases efficiency, plus it brings all important financial information together in one place. Every entry is automatically updated across the platform, so when an employee records a sale made in any location, the rest of the staff has immediate access to the information and can act accordingly.
Be Mindful of Cycles
No matter what type of business you run, there will always be some times of the year that are slower than others. Identify these cycles so that you can plan to save enough during the rest of the year to cover costs and support operation through lean times. Add a little extra onto your projected expenses to ensure that you don’t run into trouble should any unexpected problems arise.
Pay Attention to Statements
Cash flow, balance sheets, profit and loss statements and other similar types of reports provide a picture of the financial health of your business. Learning how to read and interpret these statements is vital to keeping the company going. If the numbers confuse you, get help by taking a small business accounting course or hiring an accountant to walk you through the specifics.
Don’t Forget to Reconcile
Just like you sit down with your personal checkbook and compare it to your bank statements each month, you should also take the time to check that all of your business transactions line up. Match your business checkbook to bank statements, look over your credit card transactions and compare all of it to the entries in your accounting software to ensure that nothing was missed. Make any necessary corrections right away to prevent compound errors that could throw off your entire budget.
Once you begin to implement better financial practices, you’ll find that it’s much easier to keep your books balanced and your money under control. Maintaining this balance supports a healthy business, promotes growth and reduces the stress so often associated with staying on top of financial records.
Want to Learn More About How to Manage Your Small Business Finances?
At Verdeja, De Armas & Trujillo, LLC, our team of Miami accountants is dedicated to providing personalized, financial guidance. We provide accurate and comprehensive financial statements as well as in-depth business analyses. Contact us today for a consultation!