Keeping track of your finances might be easy to do for your personal household. But when it comes to business accounting, you might find yourself a little overwhelmed. While it isn't drastically different than personal accounting, it does involve a little more work. Fortunately, you can make keeping track of your small businesses finances easy with these four tips:
1. Don't Mix Personal and Business
When running your own business, it can be easy to mix personal and business expenses together. However, this is a terrible idea—especially when it comes to tax time. So when you are doing your small business accounting, double-check everything to ensure that your household items such as food or toilet paper aren't mixed in with your business expenses. If you are having trouble separating the two, consider getting a bank account that is dedicated to your business accounts.
2. Track All Expenses
Another helpful tip is to track every expense that goes for your business. It might seem a little mundane, but you should be tracking everything related to your business. Invoices, expenses, and loans should all be tracked regularly. Even if you only bought pens for your business, be sure to include the receipt in your business accounting folder or software program. This will make tax time much easier, as you won't be sorting through thousands of receipts at the last minute.
3. Update Your Books Often
People who run small businesses are often busy. However, that isn't an excuse for not updating your books. Ideally, you should update your books daily or weekly. This will ensure that you aren't missing payments, invoices, or other important business money.
4. Keep Loans Separate
Finally, make sure you separate your loans and your actual income. While it might seem easier to lump these together, it can be a bad idea. If your loans are lumped in with your income, you might think you are making more than you really are. It can also make it hard to tell how much you have left to pay on your loan. So always keep your income and loans separate.
While keeping track of your small business accounts might seem difficult, it doesn't have to be. With these tips, you can be well on your way to managing your books. However, if this doesn't seem feasible to you, don't worry. You can always hire an accountant to manage your money for you.
Share9 May 2016
Hello, I’m here to talk to you about small business finances. My name is Neil. Welcome to my site. When I started my small business, I was unable to keep my finances straight. The process of calculating my profits and losses took more effort than I ever thought it would. I was confusing many of my receipts between jobs at first. Luckily, I started utilizing an accounting system that helped me keep my small business finances organized. I hope to help other people make sense of their finances as their company grows. Please continue visiting my site to learn more.