Are you excited about opening your new business, but unsure how exactly you’ll handle all of the accounting details? Accounting is an absolutely indispensable area for any company, but the ins and outs of handling money matters can feel incredibly complex and even confusing for new business owners with no prior finance or auditing services experience. Fortunately, finding your financial footing isn’t actually as intimidating as it seems.
Though you may want to hire accounting pros to help or establish an accounting department within your company, there are still several steps you as a new business owner can take to ensure your books are always accurate and up-to-date, saving you a headache when you’ll need those records later. Here are the top six essential accounting tips all brand-new businesses should follow.
1. Writing Every Expense Down Will Be Enormously Helpful Come Auditing Time
The number-one rule when it comes to accounting is to make sure every expense is recorded and every number you have is accurate. The importance of this rule cannot be understated! When it’s finally SMB auditing time and your company has to present thorough financial records for the audit, you’ll be glad you took the time to be extra careful and meticulous with your financial records. Another important tip is to always create back-ups of your financial records just in case. You may want to take a copy of these records and store it somewhere safe outside of the office, too.
2. Never Mix Personal Finances With Your Business’s Finances
Even if you feel it might be convenient to use a personal bank account for company expenses or to pay for company orders with a personal card, this can make keeping accurate accounting records all the more difficult and could make teasing expenses apart tough when it comes to auditing time. Your company should have a dedicated bank account and, if needed, a dedicated credit line. In fact, many banks have special accounts designed specifically for businesses and not for personal use, which you may want to look into.
3. Don’t Be Afraid To Consult the Accounting Pros When Needed
Especially in the early days of opening a new business, it’s important to ask for help when you need it, and accounting is no exception. No matter how savvy a business owner you are, if you don’t have any accounting experience, you’ll want to either use consultants or hire a full-time in-house employee to assist you. While you can learn to navigate the basics and gain essential proficiency yourself, nothing beats the pros!
4. Invest in High-Quality Accounting Software for Your Office
That said, you also don’t want to leave your accounting professionals to do their work entirely the old-fashioned way, either. Whether you’ve decided to hire professional accountants or you want to try doing your accounting yourself, some up-to-date software could save you significant time and make a world of difference. There are trends towards using supportive software in every area of the business world these days, and accounting is no exception.
5. Don’t Forget About Maintaining Inventory Records, Too
Many businesses spend a significant chunk of their accounting time on expense sheets and don’t dedicate enough time to maintaining inventory records. However, given that inventory is one of your expenses and could be included in an audit, it’s important to keep those records updated too. You can write yourself or your accountant a sticky note to keep by the computer to help remind you about this often overlooked aspect of records maintenance.
6. Schedule Time To Update Your Books Frequently
As a business owner, you’ve likely already discovered that if you don’t write a task into your schedule, there’s a good chance you’ll get overwhelmed with other tasks and won’t ever get around to that item. Accounting, however, is simply too important to get buried in a pile of other to-do list items. For that reason, schedule in time to update your books frequently. Whether you want to take fifteen minutes at the end of each workday to check the records or you just want to block off a larger chunk of time once a week or so, doing your updates little by little regularly can help you stay on top of important details. That way, you won’t accidentally forget to include something important, and you won’t feel overwhelmed putting together the numbers all at once at the monthly department meeting.
From recording expenses to coming up with monthly budget sheets to balancing checkbooks and more, accounting services are absolutely indispensable to making your company’s goals a reality. Whatever products or services your new business offers, establishing strong accounting practices from the start will help create a rock-solid financial foundation for the company and could save you a headache trying to locate figures or records during later company audits. In order to start off on the right foot and learn to navigate the ins and outs of company accounting practices, make sure your new business always follows these six essential tips.