The foundations of a successful business lie in the idea and accounting. Accounting is often overlooked, but it’s one of the most important facets of running a business. While it’s good to get immersed in marketing, product development, or operations, your business won’t succeed if you don’t have your accounting straightened out.
To prevent mistakes from happening, here are some Nottingham accountant tips to manage your business accounts easier.
- Automate Your Accounting
Manually recording and keeping books for accounting purposes is very old school. A more efficient way of bookkeeping is through an accounting software. You can even sync your inventory and payroll into your accounting software. And since everything is on the cloud, you can check your financial data anywhere and anytime.
Additionally, accounting software has a feature that allows you to create a financial analysis for your company based on the data stored in the system. As an added layer of security, all your data is backed up on a server off-site. So, if ever there’s an accident or your system breaks in the office, you can be assured that your files and financial data are safely backed up.
- Hire An Accounting Firm
If you don’t have the right skills and expertise for accounting, it’s best to hire an accounting firm rather than trying to figure out ‘do it yourself’ (DIY) accounting online. These experts will be able to keep an accurate accounting record for you.
Moreover, they’ll have in-depth knowledge about taxes, which can be very helpful in the long run. When it comes to accounting, taxes can be very troublesome as the laws on taxes keep changing. You can be a math genius and never be able to figure out accounting on taxes.
With that said, accounting firms will be up to date with these changes and help to prevent your company from making mistakes with taxes. These mistakes could result to hefty penalty fees. In other situations, reporting the wrong amount of tax can turn into a tax evasion lawsuit that could lead to a hefty fine or even imprisonment. So, it’s best to leave this to the experts.
- Separate Your Personal and Business Expenses
When starting your own business, mixing personal and business expenses is one of the most common mistakes business owners make with their accounting. Right now, it may not pose as a problem.
However, in the long run, it will cause trouble for your business because your financial books won’t be consistent. It’ll be difficult to separate personal expenses from business expenses. This could be detrimental for your business if, for example, you want to apply for a business loan.
Open different bank accounts for personal use and your business from the start. Don’t ever use your personal account to hold the company’s money. At the same time, refrain from taking out loans from the bank under your personal name. All loans and credit lines for the company should be under the company’s name.
- Keep Tabs On Receivables
Extending credit to your customers makes your business more lucrative to buyers. However, if this gets out of hand, you’ll be left with losses. So, it’s best that you keep track of all your receivables regularly.
Don’t let your customer get away without paying for what they bought. Keeping track of your receivables means that you need to send follow-up emails or text messages to your customers as reminders of their outstanding payments when it’s near the due date. You can also incentivize customers to motivate them to make early payments. One way to encourage customers to pay earlier is to offer discounts on early payments.
- Do Financial Projections
In order to align your business plans with your finances, you need to make financial projections on your business. This will give you a clearer and quantified idea of where your company is headed in the following years. In addition, having these forecasts will help you plan out your marketing and sales targets for the years ahead to hit your goals.
- Do Quarterly Financial Reports
Knowing where your company stands financially is also very important. So, it’s best to check up regularly on your financial health by reviewing your financial reports quarterly. This will give you a good gauge on how your business is doing and the areas where you need to improve.
Accounting is truly an important part of your business. By using an accounting software or hiring an accountant, you can make a huge difference on how your business will be doing financially in the long run.
By implementing the above tips, you’ll be able to do a great job with your company’s accounting.