Are you one of those small business owners who like to deal with spreadsheets? Me neither. Yes, your business’s books are an indicator of how well you’re doing, but if you’re not a “numbers guy,” accounting might seem about as enticing as a root canal. Other entrepreneurs still want to manage their business finances, but get bogged down in the day-to-day and never get around to it. Regardless of how you feel about accounting, it’s one of those tasks that no business owner can avoid forever. Try finding an accountant near me for top-notch accounting services.
Here are some useful tips for your small business. Also, you can find assistance for tax services near me.
1. Track every payment
Use your books to track each payment and be clear about when they were made or received so you can easily find them if you need them later. An accountant near me can help.
2. Select the accounting method
Your accounting will support your accounting, so decide early on which method to use. Traditional accounting records income and expenses on the date of the invoice. Cash accounting records them on the date you actually receive or pay the money. Cash accounting reduces the risk of having to pay tax on the money you haven’t yet received, but is only available if your turnover is a certain amount or less.
3. be strict with deadlines
Never make late payments (especially to CRA) and give your customers a due date so you can pursue them effectively. Note any latecomers and consider not doing business with them if they continue to miss payments. This is called a credit check and the goal is to keep your cash flow healthy.
4. Track expenses
You can claim tax refunds on many business expenses to reduce your overhead costs. You will need receipts to support your claims from CRA, so keep them in a safe place and organized into different business categories. Make sure you keep business expenses separate from personal expenses so you can easily determine which ones can be claimed against profits to reduce taxes. Find accountants near me if you find this to be a process full of hassle.
5. Keep bank statements and invoices in order
Or don’t waste your accountant’s time and your money. Make sure all bank statements and invoices (purchase and sale) are available and correct and in date order. Otherwise, you’ll be paying your accountant for the time it takes to find and sort through these documents, even though it’s easy to do it yourself. Worse, if the paperwork goes missing, you could end up with a late filing penalty. For purchase invoices (such as money you owe), keep separate files for paid and unpaid invoices and store them alphabetically by vendor name. Always remember to move your accounts after paying. Number sales invoices (or money owed to you) sequentially by when they are due so that you can collect them effectively.
6. Select the appropriate software
You may not need specialized accounting software – this can be done using Microsoft Excel or its free equivalents. However, as your needs expand, you may want a more specialized package. Ask your accountant what software they recommend.
7. Create monthly reports
Generating reports at least once a month is the surest way to have an overview of your company’s finances and to ensure that you are not surprised by any unpleasant surprises. Your monthly reports should at least include a profit and loss statement and a balance sheet. Now you have a running commentary on how your business is doing. Find accountants near me if you find this to be a process full of hassle.
8. Know when to outsource accounting
If your business is starting small, it may make sense to do the bookkeeping yourself. As you grow, track how much time you spend on books each week. Calculate the monetary value of your time (for example, how much you make per hour for the company) and compare it to the cost of an accountant. Monthly accounts can only take a few hours for a professional accountant to process, so it won’t take long and will be better valued.
9. File your taxes on time
Why is this a bookkeeping tip? In order to be able to account for everything in regards to your tax correctly, you will have to record all entries at their due time so you eventually are able to complete your taxes on time. A tax accountant near me can help. Seek tax services near me in Toronto.
If you are still unsure of how this works, you can try getting in touch with an accountant near me or a tax accountant near me. You can find assistance for tax services near me.
Bottom line
If you’re not an accountant or a fan of working with numbers, bookkeeping probably isn’t your favorite task. But adopting some good habits early on can help you avoid costly logging errors. When you don’t have a system and processes in place, unpleasant surprises can arise, goals can be missed, and important documents can be forgotten. Managing your money better can help you meet and maintain your long-term goals, smooth out seasonal fluctuations and dips in your cash flow, and even improve your bottom line. Talk to accountants near me or a tax accountant near me.