As the owner of a small business, there is no better time to review - or set up - your accounting and bookkeeping systems, than the first quarter of the business year. You may not wish to get too involved in this area of your business, preferring to leave it to the professionals - and in fact, that may be the best and soundest plan when it comes to the success of your business. Be aware of the basics, such as paying vendors, billing clients and paying taxes, but beyond that, the complexities of running a small business are best handled
by a bookkeeper, accountant, or both. Here are 5 tips for having a good bookkeeping strategy:
If you hire an accountant, get to know them well: A good bookkeeper will of course help you to keep your books in order, and ensure that you and your business remain tax compliant, but they should also be somebody that you trust to advise you with your business strategy. They should be able to help your business to grow and develop as time progresses, and often, these accountants are best found through recommendations from other business associates that you respect and trust. Once you find a good accountant, take the time to work personally with them, and make sure that they are the right fit for you and your business.
Hire a bookkeeper as soon as possible: Bookkeepers are often essential for helping with many of the aspects of running a small business, and can work in conjunction with your accountant. They can be vital for recording and organizing all day to day transactions, balancing your bank accounts, helping you to keep your financial records in order, and many other typical duties associated with running a successful business. Make the most of your bookkeeper, and let them help you to free up your time to focus on other aspects of running your business.
Be as organized as possible: Organizing the data that is produced by your small business, is important if you’re to be able to use it effectively. Inventory data, sales, customer and employee data, all need to be easily accessible and recorded efficiently. Businesses can quickly get into financial trouble if their transactions or invoices are not recorded and dealt with swiftly, and the IRS will soon step in if it spots that things are amiss. Putting a strong and methodical system in place to record all data is imperative, and as a business owner, you should be methodical and disciplined with this.
Selecting the right software: It may be that the accountant you’ve selected, already has a preference, for which type of accounting software they use, in which case you can either let them continue, or suggest a different software that you have chosen. Provided the software suits you and your accountant, then there should be no real issue over which one you use.
Periodically review your bookkeeping strategy: Your business can change, and your needs as a business owner may also alter, so conducting periodical reviews of your bookkeeping strategy is never going to be time wasted. You need to check whether your accounting is being done in the most productive and cost-effective manner, or if there are ways in which you may be able to reduce your expenses, and so on.
A good bookkeeping strategy can help you get the most out of your small business, and hiring a bookkeeper or accountant (or both) that you can trust and work well with, is certainly a step in the right direction.
A good accounting strategy should be designed to improve and strengthen your business while keeping you well-informed of your state of financial well-being on a day-to-day basis. Keep your finger on the pulse, but reduce the hours you would otherwise devote to this important aspect of your operations.