How To Be Your Own Accountant
Entrepreneurs, as well as small businesses, have a lot on their plate. Running a business demands oversight, organisation, and, most importantly, attention to detail, notably when it comes to finances. How well money is managed determines how successful a business is. An organisation should have sufficient operating funds and make sure it’s spending and investing money carefully, wisely, and effectively.
If you’re looking to organise your small business, an accountant seems like a great idea. The only problem is that an accountant isn’t affordable. The cost of an accountant depends on the provider. Some charge by the hour, others at a flat rate, and some take into account factors like business revenue. If you want to save some money, become your own accountant. It’s not that difficult.
Open A Business Bank Account
Tempting as it may be to use your personal account for business finances, don’t do it. It’s not the ideal banking solution for your business. Treat your business as an independent entity. More precisely, open a business bank account, as it’ll save you a lot of time when managing transactions. Financial institutions make available various accounts specifically designed for business. Some of them are aimed at companies that have little to no employees (freelancers).
Creating a bank account for your business helps monitor spending and keep track of business expenses. What is more, bookkeeping becomes more straightforward, more transparent, and more accurate. Take into account your financial needs prior to opening a business bank account. Figure out how many transactions you’re going to have per month and see how much the bank will charge you. Most banks will waive the monthly fee if you carry a minimum balance from month to month.
Just so you know, there’s no such thing as a one-size-fits-all solution. Finding the perfect business bank account is a challenging undertaking because there are countless options to choose from. Once you find one that fits your needs, apply for an account. You’ll be required to provide personal information, such as your social security number, mailing address, and a copy of your passport or driver’s licence. You can open the account online or in person.
Set Up an Easy Way to Receive Payments
Late payments are a nuisance, not to mention that they can sink your business. Shorten payment times by setting up a system that makes it possible for customers to pay their invoices on time. Receiving payments on time and in full is essential to maintaining a healthy cash flow. If you use QuickBooks, make the process as easy as possible for yourself. Click on the Receive Payments option icon on the homepage. Alternatively, you can click on Customers in the top menu and select Receive Payments.
If you want to receive payments from customers in person, invest in a point of sale card reader. This way, you can securely set up your business to accept payments if you operate a brick-and-mortar location. Even if this isn’t the case, you still have to attend conferences, events, and exhibitions. Depending on your business, you may be selling goods and services face-to-face. This is why you should always be ready to receive payments. Offer several ways to pay, whether online or in-person.
Leverage Accounting Software
So what if you’re familiar with accounting basics? Doing things manually isn’t a good use of your time. Simplify tasks that were previously overly complex. At present, accounting software eliminates the least efficient aspects of your work so that you have more time for analysis, strategy, and human interaction. If you don’t already have a system for recording and processing accounting transactions, consider using QuickBooks. QuickBooks accounting software will save you time and headaches down the road. The software is cloud-based and can be accessed through a web browser.
Accounting software is constantly evolving and improving, so it can prove helpful for running your business. You can use QuickBooks to receive payments, track business mileage, and review reports, among other things. The monthly subscription can be upgraded as your company grows. Each plan offers more advanced features, of which mention can be made of inventory management, budgeting, time tracking, and additional users.
Making informed business decisions requires a good understanding of your financial situation. It’s worth investing in an accounting software solution that allows you to automate financial record-keeping. Your data is backed up in real-time. Put simply, if anything happens to your device, you’re able to access the information from a different one, whether laptop, tablet, or phone. Accounting software is designed to save you time. Truth be told, accounting can be challenging, even if you don’t have lots of transactions or customers.
Keep Track of Expenses
Business expenses, whether ordinary or necessary, have to be reported to the tax authority. Monitor and categorise business expenditures because some of them might count as tax deductions. Examples of business expenses you can claim are:
- Office costs (phone bills, stationery, etc.)
- Travel costs (fuel, parking, train/bus fares)
- Staff costs (e.g., salaries)
- Costs of business premises (heating, lighting, business rates, etc.)
- Advertising/marketing (e.g., website costs)
- Training costs (e.g., refresher courses)
Needless to say, not all expenses you incur are tax-deductible. Some might qualify only for a partial reduction. If you use your personal vehicle to get to work or use the public transport system, that’s not a deductible expense. It’s just an example. If you travel to meet up with a client or attend a work-related event, it’s a completely different story.
Remind Yourself About Debts
Accounting for debt is of paramount importance. You can utilise debt as part of your capital structure to finance business operations and investments. Financing can take the form of loans from banks or the sale of debt securities to investors. The outcome of your accounting can dramatically impact the classification, measurement, and earnings impact of the arrangement. If you’re in over your head, it would be best to seek assistance from an accountant. It’s better to be safe than sorry. You can hire an accountant on an as-needed basis.