If you are the owner of a small business, you are endlessly busy. Between keeping track of the day-to-day requirements and monitoring growth and profit, it’s easy to get overwhelmed and that means you might neglect important recordkeeping that will help you in the long term. Here are five helpful hints that will make accounting easier and can help ensure that you don’t miss any milestones or deadlines.
1. Business and personal expenses should be kept separate.
It’s easy to make the mistake of using your business credit card for personal expenses and vice versa. Such errors can be amended through reimbursements and revised record-keeping, but you’ll save yourself a lot of time, trouble and aggravation if you keep the two types of expenses completely segregated from the start.
2. Don’t underestimate the difficulty of your taxes—hire a tax professional.
If you’re smart enough to run your own business, it’s natural to assume that you can save yourself the expense of hiring a tax professional to file your taxes. The truth is that there’s a lot more to accounting than filling in forms. A tax professional will be familiar with deductions you don’t realize you’re entitled to take, or inform you of an underpayment that might lead to trouble down the road.
3. Be realistic about upcoming expenses.
When things are moving along swimmingly, it’s natural to assume that the status quo will remain, but you need to be realistic and anticipate that office equipment will wear down or need to be upgraded, staffing needs will change, and overhead costs are unlikely to remain the same. By planning for future major expenses and setting aside funding for those eventualities, you can save yourselves many headaches in the future.
4. Don’t forget your employees when calculating expenses.
A lot of business owners will sit down to forecast their expenses or try to figure out where their money is going, but forget to give proper weight to the amount they are spending on staffing expenses such as insurance, health care and payroll taxes. Your employees are generally one of your biggest assets, so it’s important when you’re calculating costs, you make sure that you haven’t forgotten about the expenses involved with keeping them, as well as with expanding your staff.
5. Don’t lose sight of your Accounts Receivables.
If you were an employee of a business that failed to give you a paycheck, you’d be more than just upset – you’d take action to make sure that you get paid. Yet many owners of small businesses get so enmeshed in the minutia and big decisions of their day-to-day operations that they lose track of whether clients are paying promptly and what percentage of invoices remain open. Getting behind on your accounts receivables records can let things get so far behind it becomes costly and difficult to collect. You may end up not getting paid or creating negative feelings. Track payments as they come in, noting how far behind payments due are, and which clients are presenting you with collection problems.
These tips are straightforward and simple, and following them can make a significant difference in your ability to keep your business on track, to keep your forecasts accurate, and to allow you to take action when it’s needed. For more information on other steps you can take, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
