How well you monitor and manage your finances can determine whether your enterprise ultimately succeeds or sinks. That’s why now, more than ever, small-business owners are exploring how time-honored techniques and the latest technologies can help make accounting substantially less cumbersome.
Here are 5 tips for streamlining and simplifying your accounting practices:
1. Understand the basics. New entrepreneurs routinely underestimate how critically important sound accounting practices are to the viability of a business. Those who fail to make accounting a priority run the risk of serious errors. From missing payments to incorrectly withholding taxes, no shortage of potential threats to one’s general bookkeeping — and to the business itself — may arise from slapdash accounting habits.
2. Stay organized. Accurate record keeping is the proverbial glue that holds your business together. Records that are improperly updated could lead to disaster. On the other hand, accurately maintaining your books through exceptional organization will help you avoid problems — or at least expose them before they become too onerous and costly to resolve.
3. Select software wisely. Your selection of accounting software is, without question, one of the most important decisions you will make for your business. Fortunately, going high tech doesn’t have to be hard. “To buy a program like QuickBooks is the best thing you can do to get started with accounting in your business,” accountant Peter Tumbas of Tumbas CPA tells the Intuit Small Business Blog. “The capabilities of today’s leading accounting software should help you avoid most — if not all — major and most common accounting problems.”
4. Trust technology. It isn’t enough to simply purchase accounting software; you have to make the most of it. Reducing the likelihood for human error in your bookkeeping is one of the best ways to ensure that your records stay accurate. By learning how to use the full scope of features in your accounting software, you can automate tasks, reduce paper waste, double-check your work, and make general accounting chores significantly less frustrating.
5. Be consistent. Consistency is essential to successful small-business accounting. In fact, nowhere are the dangers of a slippery slope more evident than they are here. As soon as you grow lax in documenting sales, expenses, and other simple but critical data, the entire accounting process can quickly deteriorate into a massive — and potentially very expensive — headache. Fortunately, being consistent doesn’t require much more than establishing sound practices and a strict adherence to them over the long haul.
For more sage wisdom about small business accounting, check out Mavenlink’s new study and corresponding infographic: The Accounting Cheat Sheet for Small and Micro-Businesses.