All the Small Business Accounting Tips You Should Know

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You work hard to make sure that all of your small business dreams come true. However, it is likely that accounting wasn’t a part of that dream. Unfortunately, a small business’s success relies on solid financial planning and bookkeeping. If that’s not your specialty, no need to worry. We put together this helpful guide with all the small business accounting tips you need to ensure success!

Get Organized

Organization isn’t everyone’s default setting. If you’re one of those that aren’t normally organized, then there are some easy steps you can take to help you get there.

The first step? Make sure you have separate bank accounts for personal and business expenses. There are a lot of benefits to this. Aside from saving you time and money, it also makes your taxes easier and protects your personal assets from legal liabilities. 

Create Systems that Work for You

What works for someone else may not work for you and your small business—especially when it comes to accounting. That’s why you need to create a record system that works for you, not against you.

Maybe you prefer doing it all yourself? Or maybe you want to outsource? Once you decide, you can start compiling accurate financial documents and decide on a schedule for reporting. Creating systems will help you to keep everything straight and avoid issues down the line. When you have an accurate understanding of expenses and income, you’ll be able to better prepare your small business for success.

Nail Down the Essentials

There are a few must-knows when it comes to small business accounting.

Profit/Loss Statement

You might have guessed it from the name, but this financial statement helps you understand how profitable your business is (or isn’t). You can use this information to make informed decisions that can improve your business.

Balance Sheet

A balance sheet helps small business owners understand how much value their business possesses. Start out by counting up everything that your business owns and comparing that against what your business owes

Cash Flow Statement

Again, the name probably gives this one away. Cash flow statements help you to understand how you’re spending money and how you’re earning it. Because cash flow is essential for a successful business, this statement is possibly the most important of those you’ll deal with. 

Don’t Wait Until Tax Season to Prepare

We can’t stress this one enough. Don’t wait until tax season to start worrying about tax season! Trust us. You’ll thank yourself come tax time if you’ve spent time preparing all year long. 

What does that preparation look like? Putting all the other tips together! Make sure that you’re organized. Employ those systems you put in place. Keep track of those essential financial documents. Follow these tips, and you could save big next tax season!

Make Sure You Have the Right Help

Whether you decide to go with the DIY approach or get the help of a small business accounting professional, make sure that you set your business up for success. The experts at Banks, Finley, White & Co. are prepared to help you grow a successful small business.