The financial part of running a business can be hard and time-consuming, especially for entrepreneurs and small business owners without a financial background.
Here’s how to manage your company’s accounting.
What books will tell you ?
Cash : Do we have enough cash to run
Costs : How are my costs - cost of goods sold and operating expenses.
Growth : How is revenue and margin growing over period.
Trends : Are we on track to hit our business goals and is anything unexpected.
Practice good financial hygiene :
- Choose a good business bank and credit card for banking - Have good reporting and low transaction limit, higher credit card limit.
- Don’t commingle business and personal expenses, set a budget/capital if you are using personal fund.
- Use professional systems like quickbooks or xero or POS for accounting, organising your payroll, bills, invoicing and tax accounting in one place and get organised.
- Start bookkeeping early - accurate financial data helps you to make better decisions, will be less painful when you scale.
- Have accrual basis books - Important for auditing and investors, represent true picture of business.
- Setup good invoicing - Aged receivables tracking, decide payment terms and helps accurate bookkeeping.
Companies with good financial hygiene :
- Spend less time on bookkeeping - use automated systems
- Avoid legal and compliance issues
- Avail tax credits
- Make realistic projections based on accurate numbers
- Impress investors with financial maturity
Book a 30 minutes free consultation with our bookkeeping experts.
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