Three Critical Accounting Tips For New Small Business Owners

Posted on: 22 August 2016


Opening a small business is a lot of work, but you already know that. Unfortunately, once your business is up and running, the hard work isn't over, but it is instead just beginning. This is particularly the case when it comes to your finances. Keeping your finances in order is a long-term responsibility that can make-or-break any organization. Make sure you're on the right track.

Utilize Separate Accounts

Make it a point to keep your finances separate. A common mistake made by small business owners, especially those that are generating very little profits, is to intermingle their personal finances with their business finances. Failure to keep things separated can only complicate matters.

When you don't separate the two, you will constantly have to go back and the end of each day, week or month and crossover expenses, which can be a lot of work depending on the number of transactions performed. Secondly, this poor practice can make it harder to analyze your profits because those personal deductions you made might accidentally get recorded as a business transaction, causing you to come up with a false bottom line.

Keep All Records

One of the most stressful, and sometimes scariest, things about opening a new small business is the unknown. You don't really know what to expect so you have to be prepared for everything. Your finances are no exception to this statement. However, you can better prepare yourself by keeping a record of everything.

It's critical that new business owners get in the frame of mind of keeping a record of every transaction, including invoices, checks, receipts, and even budget logs. You never know when this information will come in handy or may even be necessary, such as for the IRS. When you already have this information on hand, half the battle is already won.

Don't Overlook A Pro

Don't fall for the misconception that professional accounting services are only for larger, more established businesses. The day you decided to open your own business, you justified the need to rely on one of these professionals. Accounting professionals aren't just for taxes, but they can also be highly beneficial when it comes to setting up your accounts, profit planning, and expense management.

In the long run, this assistance won't just keep you more organized, but it can also help you work towards your goals more aggressively and with clear direction. Don't overlook the benefit of professional skill like Don Lamb CPA Inc P.S.

Organized finances are the foundation of any successful business, including yours. Make sure you are setting yourself up for success.