Small Business Accounting Tips that Will Preserve Your Sanity ...

Every small business owner has been there; sales have never been better but you can?t fulfill orders because of backed up paper work. At just the time you are most needed to run your business you feel like your business is running you.

Here are some simple yet much needed small business accounting tips that will keep you from becoming overwhelmed by all the paper.

Tip #1: Keep it Separate

Too many business owners mix personal and professional finances and later regret it. Even if you are sole proprietor and your only employee, keep personal and business finances separate at all costs. Every small business owner should have a separate business checking account. If you should need funds from your business, make a cash withdrawal or write yourself a check. This will make expense tracking and budgeting much easier on you. Come tax time, you will thank yourself for being able to accurately track business expenses.

?Tip #2: Stay Up to Date

Falling behind on your bookkeeping will slow down everything else in your business. Schedule specific days and times to primarily deal with bookkeeping. If you can?t make the necessary time to successfully complete that task, you probably should consider outsourcing the work, or hiring a part-time bookkeeper. The success of your business cannot happen without your bookkeeping running smoothly.

?Tip #3: Know and Use Your Numbers

Your financials reflect a lot about your business but you have to know what to look for. If you have a bookkeeper or accountant, look to them at least quarterly for a thorough breakdown of your financial position. Either should be able to give you a written and oral report on how your business is performing. What areas are weak, and what areas are strong. They also should be able to provide advice and an action plan on how you can strengthen your financial position.

Tip #4: Know What to Look For

Recognizing expenses and revenue will make the difference in how your taxes are calculated and how your business performs month-to-month. If you use the accrual basis accounting system, your year and month end numbers will be very different than in cash basis accounting. Know what accounting method you are using, and how to recognize revenues and expenses correctly.

Tip #5: Check, ReCheck, and Triple Check

If you do not use an automated accounting software program (QuickBooks, etc) there is a possibility your books will not balance at the end of every period. A ?Trial Balance? method will help you catch mistakes early and often and save you from year-end headaches. It might also help you spare the added expense of having to use your CPA to find problems after the fact that arises from calculation errors.

Never blindly trust your accounting software. Even the best software can?t protect you from erroneous information. Protect yourself by reconciling your bank account against the program every month. That ensures you catch errors that may have occurred when filling out checks, invoices, or journal entries.

These simple small business accounting tips will go a long to preserving your sanity and allowing you to do what you do best ? run your business.

Source: http://bwkaccounting.com/2012/03/small-business-accounting-tips-that-will-preserve-your-sanity/

meredith vieira josh hamilton fab melo preppers prop 8 paul pierce larry bird