Not all business owners are good with numbers and it should not hold them back from doing well in business. There are some steps you can follow and do yourself, but there usually comes a point in business when it might be time to hire an expert. Getting help in business is important because it frees you up to focus on tasks connected with growth. For some businesses starting out, this might be out of the question as the cost is quite high when hiring and accountant or bookkeeper. If you are going to try and do this by yourself at first, here are some important tips you should apply.
- Every cent matters
If you just had a lunch with one of your friends and paid with your business credit card, you need to count that as a business expense. The amount is not really important, but if it was paid for by the business’s money, you need to take that into your calculations. Remember when you were struggling at school with some accounting homework problems and you realize that the teacher included a transaction that you felt unnecessary? Checking your accounting homework solutions, you realize that that small transaction was the difference between the incorrect and correct answer. This is how accounting works. Your books need to balance at the end of the day, so include every cent.
- Update regularly
With all the great accounting software out there, you stand a better chance of running your accounting practices well. When you do your books once every 6 months, the task might be bigger than you anticipated. Instead, you can save yourself a lot of trouble and update your books regularly. This is going to save you so much time and effort going forward. It also gives you an idea of where your business is financially.
- Plan ahead
There might be a big expense coming in the near future and you need to prepare for it. Do not take from one budget to pay for another. Instead, anticipate the expense and then work on saving money for when the time comes to purchase. The money is not simply going to appear out of the blue, but if you want to run a successful business, you are going to have to properly plan for the expense.
You may consider hiring someone after dealing with clients who do not pay well. If the job was completed successfully, you might think that all clients would simply pay what is due to you. Unfortunately, this is why businesses employ debtors control staff, because customers do not always honor their obligations. Follow up on any outstanding payments regularly and do not let too much time pass after the clients was supposed to pay.
- Split expenses
Even though you work hard to make your business work, it does not help if you are using up all the business’s money to use in your personal capacity. Draw a salary at the end of the month and nothing more. The business finances and your personal finances are two very separate things. You cannot cross these boundaries because it can get out of control very fast. Only spend what you budgeted for from your salary and use the business’s money to pay for the business expenses.
- Records and filing
You are going to have to get into the habit of filing all of your invoices and additional documents. Make sure your filing system is of such a nature that you do not have to search around to find something. Know exactly where what is and stick to it.
Make sure you enter the correct codes for your invoices as well as allocating it to the right customer. When business is booming, this task can become overwhelming, but rather take a few extra minutes and get the job done properly. Many businesses look money by invoicing incorrectly and waste a lot of time searching for the mistake. Avoid this by paying attention to each transaction you record.
- Ask for help
There is nothing wrong with asking for help when it comes to business. When I need help with my accounting homework, I am going to find someone to help me. The same applies to business. Do not be afraid to reach out to people who know a bit more than you about accounting. Before you know it, you will be an expert, but for now, ask for help if you need it.