3 Strategies to Spice Up Your Accounting Process

3 Strategies to Spice Up Your Accounting Process

If you’re a small business owner without a finance background, then accounting is probably your least favorite part of entrepreneurship. You have to manage your payroll, supply costs, operational expenses, and taxes. To successfully manage your finances, you have to either learn some basic accounting skills or hire someone.

There are a number of accounting strategies, and it’s hard to know which method suits you best. What works best for you will depend on your business’s structure, your state’s tax laws, and your business’s size. There isn’t a single method that’s ideal for all small businesses, so continue reading to learn three strategies that will spice up your accounting process.

Double-Entry Accounting

When it comes to running a business, it’s imperative that you have an accurate picture of what’s going on with your finances. Double-entry accounting is more meticulous than single-entry, and it’s necessary if you plan to expand your company.

Double-entry accounting means that each transaction is logged two times—once as a debit and once as a credit. For instance, if you run a beauty supply store, you would use double-entry accounting to manage your accounts with your suppliers.

If you paid on a debt owed for a shipment of mink lashes, then your payment would be logged in two separate accounts. A debit account would reflect that money has been paid out for a debt, and the credit account would show the reduction of the debt.

Account for Growth

You may be a small business owner now, but you should always have plans for future expansion. Even if you’re not trying to build a Fortune 500 corporation, you should always be on the lookout for opportunities to grow your revenue.

double-entry accounting for growth

There are several methods you can use accounting to promote the growth of your company. Which method is best for you depends on your goals and the size of your business.

One way to expand your business is by reinvesting your profits. This is the most popular and most sure method of growth. You have to invest in your business for it to flourish. Take a pay cut now, and put more of your revenue into upgrading your enterprise.

You can also try streamlining. Streamlining your business’s finances is all about eliminating financial waste. This can amount to anything from adjusting your hours of operation to making personnel changes. The object of streamlining your finances is to trim the fat by getting rid of anything that costs more than it yields.

Use Technology to Your Advantage

Bookkeeping isn’t an easy task, and it can be especially daunting when you’re first learning the entrepreneurial ropes. As frustrating as it can be, it’s crucial that you manage your finances with a careful eye and level mind. Accounting problems are one of the most prevalent causes of failed businesses.

If you’re not an accountant by trade and aren’t particularly financially literate, then you should use an accounting program. Many of the accounting tools available do all of the hard math for you. All you have to focus on is the data entry aspect.

For instance, apps like Quickbooks help you to track your operational expenses, revenue, payroll, and even tax liability. It’s a very unsettling feeling to watch auditors sift through your tax folders looking for discrepancies. Using the right tools can prevent you from making costly mistakes that could lead to trouble with the IRS. Some of them even offer services like assistance in the case of an audit. As you can see, when it comes to accounting, there’s even an app for that.

For your business to thrive, you have to be vigilant about your finances. You have to keep an eagle’s eye on your operational and supply costs, payroll, revenue, and tax liability. Tracking your company’s finances may be daunting, but if you apply the right strategies, then you’ll set yourself up for longterm success.