That more and more #people are taking up the entrepreneurial challenge by starting their own businesses is no more news. In fact, with the economic recession pushing more people into the labor market this is indeed a good thing.
Now, one of the areas you need to manage very well if you want to succeed with your #small business is the financials. You need to manage your business books properly if you desire to see the good results.
While you don’t have to be some financial expert to do this correctly, fact is, if you plan to be your own accountant, there are many tax pitfalls you can fall into during the upcoming year if you are not aware of them.
While balancing your own books can be a viable way to save money, tax and bookkeeping errors may cost you a great deal in fines and lost time. The way out is to have a workable system that will help you manage your business books effectively.
No matter the size of your business, you can avoid a lot of mistakes by practicing a few simple accounting strategies. In this post I want to share with you a few proven accounting strategies that will help you manage your business books and succeed doing so as a small business.
Strategies for Managing Your Business Books Successfully
1. Plan Ahead
One of the most effective strategies for keeping an efficient bookkeeping system for business can be to plan carefully from the start. Read and review different types of accounting software and be aware of new rules that might affect you as an #entrepreneur.
As MVU Online reports, technology is changing accounting practices and you must be quick to adapt. Once you find a system that works for you, create an accounting schedule so you can plan to do certain tasks on certain days to remain consistent.
2. Track Business Expenses Carefully
When you balance your own books and handle your own tax information, you must remember to record business expenses carefully and truthfully.
Some business expenses may include office furniture and supplies, gas for a vehicle you use for business, and shipping supplies. If you #work from home, you may even be able to claim certain utility bills, such as heating, lighting, and wireless internet.
Record usage each day and keep all business receipts in one place so you can access them easily.
3. Seek Training
You do not have to be a financial expert to do your businesses’ books, but it may help you to take a few accounting classes or a seminar to gain a bit of additional know-how. If you are planning to be your own accountant in the long term, you may want to consider getting a master’s degree in accounting, especially if you plan to grow your business quickly.
If you are considering the pursuit of a master’s degree, New England College offers a variety of graduate degrees in accounting. Having additional education from this institution may help you keep up with different types of accounting practices. NEC also offers online forensic accounting degrees, which may help you find a job if you decide to switch careers later on.
4. Include Taxes in Your Business Budget
While it is always exciting to make a profit with your new business, you should remember that not every dollar you make will remain in your wallet. Taxes must be paid, and when the time comes to pay them, they might take you by surprise. However, you can avoid this by budgeting for your taxes all year long.
One way to save for your taxes is to open a separate account for the money and save about twenty percent of your monthly income for taxes. By tax time, you will not have to scramble to find the money elsewhere.
As a small business owner being your own accountant will definitely save your business money, especially if you are running on a shoestring budget during that difficult first year. But it’s important that you brace up for the challenges this throws your way. You will need to carefully plan and ensure that you keep up with new tax rules and regulations as this is essential to your continued success.
As long as you stick to these strategies, managing your business books yourself will be enjoyable and less tasking.