Starting out a new business many people decide to economize and do their own accounting. To avoid any mistakes, here are some tips.
Organize
Record everything…each sale and each check or payment. Store the receipts safely and neatly. If you store electronically, be sure everything is labelled so that you can easily retrieve it if there is a question about whether an invoice has been paid or a customer owes you money. This is also a huge benefit at tax time.
Budget
Just like household expenses, it is critical for a business concern to establish and maintain a budget. It will give you a clear picture of your expenses and projected income. With your weekly, or at least monthly, reviews, take a peek at your budget numbers and see how you are stacking up with the numbers you originally generated.
Regimen
As odious as it sounds, work on the books at least once a week. Procrastinating only makes the task feel worse and with more volume, it is a recipe for mistakes. Also, looking over the accounts once a week will let you know if you are on or off track in any area.
Do the Math
Review your bank accounts against your business accounts. If there is a discrepancy, you want to deal with it as soon as possible. Moving quickly means that the data is fresh on hand for all parties and easier to resolve.
Everything is Important
Even small transactions can add up. If it is business related, keep a receipt and record it. If there is an audit, you are ready and organized.
Back Up Plan
Keep backups of all financial information. In this case redundancy is good. Hard drives can crash and even clouds can be infiltrated. Back up all data on a regular basis and keep your financials secure.
Use Technology
Working off an Excel spreadsheet may be easy, but there are a lot of really good software programs available for small businesses and start-ups. If you find the right program for you, it will save you time and energy and can even provide some valuable suggestions for improvement. These programs will also help you keep everything in its correct place. Putting the financial data in the wrong box can affect other entries and totals.
Integration
Many of the software accounting apps will interface with your bank accounts. If you decide to work with an accounting firm, you will have an easy package to transmit, plus all of the history of your transactions in a single location.
Outsourcing
If it is truly beyond your capabilities or time constraints, consider hiring a bookkeeper or accounting firm. Professionals can also help you with long-range planning and tips about compliance and reduction of tax liabilities.
If you are in a quandary, don’t hesitate to contact us at Capex. We have Professional CPA’s in Mississauga who are happy to sit down and consult with you so that you make the best decisions possible for your business.
Contact your Accountants today click on this link —> https://capexcpa.com/contact
- The Capex Team