If you have just started a business, or have an established business in place, you need to track your business expenses. For many people, it is an overwhelming task especially as their business is continuously growing. Here are a few tips that will help you in keeping a better track of your company’s transactions.
Your Business Bank Account
Do not use your personal account for your business! As the transactions increase along with your personal ones, you will end up in quite a messy situation. A business bank account helps you track the business income and expenses better, but also ensures that this account is distinguishable, separating all the personal and business activities.
Avoid Cash
Do you know why the outlaws in action movies always use cash? Because they are harder to track! Among business transactions, cash is the most difficult to track. It is better to use a credit card, or debit card, or a cheque instead of cash because it leaves a trail that can be followed.
Schedule
When you schedule the maintenance of your records, you make it easier for yourself to keep on top of all your business records. It helps you control the cash flow and it automatically tells you how your business is doing. So, pick a specific time every week to maintain and review the record. Even when you take the services of an accountant or an accounting firm, be sure to keep a schedule and check.
Use technology
Many software now helps you keep track of financial records on the go. Such software makes your life easier by keeping the data on the cloud, securely of course. As it is automatically backed up, you can access it anywhere with an internet connection. These software include Quickbooks Online, FreshBooks, and Xero.
When you connect your bank account with this software, it auto-downloads all the transactions and posts them to your online account on the software. This makes it very easy for you to see what is happening with your business, without opening your bank statement. Many people may be uncomfortable with connecting their bank account with software, but it is actually quite secure and keeps your information confidential.
Taxes, Taxes
Of course, everyone hates taxes, but you have to pay and ON time. As you keep a good track of your financial transactions, you would not miss the filing requirements and meet the tax obligations. When you are required to show all your records and receipts, you can do so only if you tracked them accurately from the beginning. For example, if you have employees on the payroll, you have to enroll for payroll tax i.e. Pay As You Earn, and then remit monthly. Or if you deal with vatable goods
If you are using software, this is where it will prove to be very valuable!
Outsource your Bookkeeping
Many companies, especially small businesses, find it difficult to find a good accountant. More than 1/3 of small businesses outsource their accounting. There’s absolutely no doubt that using an outsourced accounting firm brings several benefits like saving a LOT of time and cost. It saves the time you would spend on the hiring process, and get you the most experienced accountants without too much effort. The scaling of your bookkeeping is easier. You can scale up or scale down according to your own requirements without any lag. The best thing is that they become your financial advisors as well!
Accounting firms use automation technologies like Quickbooks, Microsoft Dynamics, Safe, and so on. This software helps get real-time reports, minimize human error and reduce the risk of fraud due to transparency. If you already used software, it will update your information automatically and keep you informed in real-time.
To choose a good accounting firm to outsource, consider what are your accounting and bookkeeping needs, your competitive cost range, and the expertise you require. Also, remember to check the terms and conditions carefully before you share your internal business transactions and confidential information.
Keep a Complete Record
Yes, even with all the online software and outsourced accounting, keep a COMPLETE record of all your company’s transactions separately, all backed up, easily accessible upon request. It makes accountability hassle-free if you have all the accounting records, asset, and liabilities records, and day-to-day transactions. The law requires you to keep the business accounting records for a minimum of 6 years.
Accounting may be overwhelming, but you can up your game using various software or a great accounting firm and take your business to the sky. It’s imperative that you utilize the tips provided here because by doing so, you’re going to be able to run a successful business in a smart and organized manner.
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