Running your own business is pretty daunting.  One of the most important aspects is a good and accurate accounting system.  Unfortunately, this is also an area where you can make mistakes if you are not careful. 

Follow the Rules

It is a common mistake to try to “wing it” when it comes to a small business.  Just like a big company, you need to establish and follow some protocols, especially around accounting.  For instance, set up a check list or standard form when setting up a new client or vendor.  This will make it much simpler as you make entries into your accounting system.  It will assure that you have all the information to bill and pay and makes it so much simpler at tax time. 

Typos

Everyone is going to make mistakes.  However, if you set up a routine to reconcile accounts on a regular basis, you will find them sooner.  As an example, reconcile the bank statement within two days of its arrival.  Look at accounts receivable every week or two.  Catching an error quickly is easier than looking through months of data.

Back Ups

Make it a point to perform regular backups on critical information, especially accounting.  If you keep everything on a single hard drive and it crashes, you are in big trouble.  If you backed up the data at least once per week, you only have a week's worth of data to re-enter.  If you haven't backed up in six months, you will have a lot of reconstruction.  Backing up information that is pertinent to the continuation of your business is equally important.  Files do get corrupted through no one's fault.  You need to be sure you can continue operating if that happens.  A really good backup is a cloud system.  The cloud company usually backs up daily, so you will have the best chance toward success. 

Budget

Establishing a budget is the best way to set a standard or baseline to judge how well your company is doing.  It is also a good reminder to keep expenses in check and to track revenue.

Income and Expenses

Recording income and expenses means allocating the proper category for each item.  This will be of most benefit at year end when you are taking your taxes for preparation.  Everything is organized and easily understood.

Delegate

Feeling that you need to maintain control by doing everything yourself can be a stumbling block.  Dole out the administrative tasks.  Whenever possible use a professional rather than rely on yourself.  That includes IT, legal, and accounting.  You will have more time to do what you love, run the company and you can be secure in the knowledge that specialists are covering you where needed. 

For more great ideas about how to avoid errors, typical and unusual, check with your accountants.  If you don't currently use an accounting firm, it may benefit you to schedule a consultation to see how their advice can help you.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team