When most people start a small business they are very excited about offering their product or service. Many focus on their passion but leave their bookkeeping or accounting by the wayside. Don’t let this fate befall your startup. How can you bring something great to the marketplace and also keep proper books?
- Stay Organized
These days, with so much business online and done through credit cards and online transfers, you might feel like you have easy access to all of your financial transactions. However, the better you are organized, and the more you keep track of all of your records, the better off you will be. Make sure that all of your transactions can be found on one file or spreadsheet, and are easily accessible.
It is easy to throw all of your receipts into one envelope or a file but it’s much better to separate them into more distinct categories. Taking the time now will save you a lot of future headaches. This will also help you see where you are spending too much, and, of course, will come in handy during tax season.
- Proper Invoices
Invoices can be unchartered territory for new businesses, but they are vital. They will let customers know that payment is owed, and you can also see which customers pay on time, and who has a habit of falling behind. The faster you learn to make accurate invoices, the faster your business can grow.
- Precise P & L Statements
Proper invoices will help you keep tabs with customers, and proper profit and loss statements will give you a proper look at the general well-being of your business. They will recap expenses, and will also make sure you have a handle on the following items:
- Relevant data for product returns, discounts, and any cost or price reductions you might have offered to your customers
- Receipts and petty cash
- Purchase Records from your business credit cards and business checking account
- Any and all sources of income which might include cash payments, checks, and credit card payments
Securing a Business Bank Account
Trouble can arise when when mixes personal and professional finances. Hence, it is very important that you open a new bank account in the business’s name. This will help you keep track of cash flow, and make your life much easier when tax season rolls around and you can file properly.
By following these simple tips, an often scary part of business will soon become your strength and help you make a living or even a fortune.