Business owners want to focus on running and growing their business, not dealing with paperwork, credit card receipts, and tax filing deadlines. Follow these best practices to help your small business accounting processes run more efficiently.
Consider Corporate Credit Cards
Applying for individual corporate credit cards can simplify your accounting practices. It can help keep business finances separate from personal spending which makes accounts payable easier at the end of month. Reconciling one statement per employee is much simpler than collecting several different expense receipts from multiple employees.
Set Up Separate Bank Accounts
Just as keeping business expenses apart from personal expenses helps make the accounting process easier, so does keeping separate bank accounts. Employee payroll can be managed separately from real estate rent or mortgage payments, etc. Having separate accounts helps ensure funds are always available for their intended use.
Think about your personal financial goals. Do you save for them all in one account or do you have unique accounts for each, such as retirement and a vacation fund? The same principle can be applied to business expenses and revenues. Before opening several accounts, inquire about any applicable monthly fees as well as any discounts available for having multiple accounts.
Make it Easy with Cloud Accounting
Could accounting make the life of a small business owner (and the staff) easier because it enables data to be stored securely online? When storing information “in the cloud,” you and your staff can access the data from any location with an Internet connection.
This mobility factor increases productivity and minimizes time spent looking through stacks of papers. Saving time and boosting process efficiencies are major benefits of cloud accounting — especially during tax time.
Always Have a Backup
In a world where so much is kept and stored online it’s important to have a backup in case of technical difficulties. According to AllBusiness.com not having a backup is one of the 10 deadly sins of small business bookkeeping.
Switching to or implementing an online cloud accounting system is a great accounting tip for many small businesses, but sometimes unforeseen outages can occur. Backing up your system regularly ensures all data remains secure and up to date.
Spend Money on the Right People
There is no sense in spending money on an efficient small business accounting system if you do not have the right people to run it. According to Forbes one of the biggest mistakes small business owners make when it comes to accounting is not hiring the right people. Spend a little extra time finding experienced, knowledgeable employees who can minimize errors and help simplify your accounting processes.
Plan for Tax Time all Year
Having a good small business accounting system in place with the right people managing it on a daily basis helps ease the workload during tax time. Keep on top of filing deadlines, payment due dates, as well as credits and deductions available for small businesses. This helps you to avoid any late payment fees as well as maximize your return when filing.
For more information about accounting processes and preparing small business taxes, check out this article about getting ready for tax time.