Anyone who has set up their own small business, (or who is in the process of doing so) will know that handling the accounts can be one of the most time-consuming and most frustrating areas of day to day management. It is also the case that most new businesses don’t have the funds when they first get off the ground to hire their own tax attorney or accountant. Consequently, most small business owners and start-ups will end up handling their own accounts and for many people this can be intimidating as they might not know how to do this.
This article will look at a number of ways you can soften the blow and get your accounts organized, balanced and legal.
Get decent accounting software
The price of such software has come down over the years to the point where it is now exceptionally good value considering the time and effort it will save you. The only thing to bear in mind is that it will take you a bit of time to get to grips with the software, so purchase and install it as soon as you get the business going and become familiar with it before you start moving money in and out of the business. Get your accounts right from the start and you will save yourself an awful lot of time and worry later in the year. Popular accounting software solutions include Quickbooks and Quicken, among others. If you find yourself taking time to learn how to manage the software whilst the business is getting going, don’t be afraid to keep accounts the old fashioned way with a ledger. Go to your local stationers and buy a simple ledger book and enter every transaction until you are comfortable with the software.
Keep detailed records of everything that happens throughout the day
It is essential both legally and for your own records that you hold onto every single financial document, from invoices to deposit slips, bank statements to canceled checks and business receipts. There are all kinds of filing systems out there for such records – find one that is comfortable for you as you will be using it for many years!
Keep it simple
Don’t try and categorize every single purchase – try to generalize them into groups. Thus you don’t need a category for paper and one for printing ink – instead, simply have one category of stationery or office supplies. This will mean it is quicker and easier to balance all of your accounts come the end of the year.
Be consistent in your accounting methods
If you don’t like something when you first start out then find a way of doing it differently, but once your system is in place, try to stick to the same methods. This consistency will mean that your books and records are always done in the same way and will lessen the chances of errors creeping in. This is important when you are going through the books at the end of the year and even more important when you eventually hand the books over to an accountant!