If you’re a small business owner who’s just starting out as an entrepreneur, you probably have to “wear many hats.” In other words, you have to handle certain tasks and responsibilities that you may eventually be able to hire someone else to take care of.
Performing various accounting tasks is one example. Again, once your business grows, you can hire an employee or freelancer to manage your small business accounting for you. In the meantime, you may need to be your own accountant.
This doesn’t need to be as stressful as it may seem! Yes, you will need to prepare thoroughly to ensure your business remains financially healthy. That said, many successful small business owners started out not knowing anything about accounting.
If the prospect of handling accounting tasks overwhelms you, keep the following tips in mind:
Separate Your Expenses
This is one of the wisest and simplest steps you can take to make handling your business’ accounting needs much easier. It’s always important to separate your personal finances from your business finances as soon as possible when starting a business. Make a point of creating a separate bank account for your business right away.
Managing small business accounts doesn’t necessarily need to be a complicated task. At worst, it may simply be a somewhat tedious responsibility at times.
For example, you need to track all expenses and revenue. This includes even seemingly minor expenses.
Will this task be “fun”? No, probably not. But, it will help you feel less stressed when focusing on more engaging tasks as a business owner.
Also, be sure to track loans and any other forms of income. If you don’t, you may end up underpaying your taxes. You could incur penalties as a result.
Use the Right Software
Various tools have made starting and running a small business easier than ever. For example, while it is a good idea to hire an accounting professional when you can justify the cost of doing so, in the meantime, you can simplify the process of handling your business’ accounting needs by using the right small business accounting software. Research your options to find one that you feel comfortable with.
Stay on Top of Inventory
Many small business owners focus so much on monitoring their expenses and income that they forget to monitor their inventory. Don’t make this mistake. Theft and general misplacement of inventory and resources cost businesses quite a bit of money every year. You can significantly boost the overall financial well-being of your business by keeping track of your inventory.
In an ideal world, all clients would pay invoices promptly. Unfortunately, that’s not the world in which we live. As your business grows, you’ll find that clients sometimes fail to pay invoices in a timely manner. Often, this occurs merely because they forget to pay.
Guard against this by setting automated reminders on your calendar app (whichever one you choose can probably serve this purpose) whenever you send an invoice. If someone hasn’t paid an invoice on time, contact them to let them know.
Most importantly, don’t let all this overwhelm you. Again, managing your small business’ accounting needs can be easier than you think. These tips will help.