How To Manage the Financial and Administrative Aspects of Your Business
For many business owners, bookkeeping is an onerous task. However, it is one of the most important aspects of keeping a company afloat. In fact, the most common reason for a business to fail is a cash flow issue. A proper accounting system helps business owners keep up with income and expenses in real time so that adjustments can be made before a cash flow problem becomes disastrous. Fortunately, there are many options to make bookkeeping and accounting easier for business owners. VR Business Sales presents some tips and resources to help you manage this aspect of your business.
Try DIY Bookkeeping
For those who choose to do their own bookkeeping, it is important to understand the special taxes imposed on businesses, including payroll and sales taxes. Research the tax implications for your business structure (i.e., LLC, sole proprietorship, partnership). Once you are familiar with all of the financial aspects of running the business, you can begin devising a bookkeeping system that meets your needs.
Your system will include important elements such as billing software and payroll software. When selecting software to handle billing and payroll, research the features of the product and make sure they match the needs of your business. For example, many business owners choose to have the payroll software automatically fill out tax forms and e-file them. Others need checks to be direct-deposited into employee accounts automatically. A timesheet calculator is also a handy tool.
Many businesses also need a system for tracking inventory. Square notes that one of the most integral parts of your business is inventory management, mainly because of the importance of evaluating your business on a regular basis to ensure you’re on track to succeed. Timely assessments can also include scheduling time at least once a week, preferably in the morning or early afternoon, to do bookkeeping tasks. Trying to do paperwork when you are tired after a full day of work is likely to result in mistakes. Stick to the schedule so that paperwork doesn’t pile up.
Hire a Bookkeeper
Accounting and tax paperwork can be overwhelming for business owners, so many decide to enlist extra help. Whether you decide to delegate inventory duties to a trusted employee or hire a bookkeeper, do your due diligence to make sure that the person is both qualified and honest. Your finances are key to your business’ success, and you want them in good hands.
Make sure to check references and research any professional organizations to which the candidate belongs. When candidates are certified or licensed by the National Association of Certified Public Bookkeepers or the American Institute of Professional Bookkeepers, it’s a good indication that their knowledge and skills are up to date.
Consider hiring on a provisional basis for a short-term trial to ensure you are satisfied with the work. You should be able to see all the data and reports at your request, and the bookkeeper should be able to fully answer any questions that you have. Make sure you know the passwords to all accounts so that you can access them if needed.
Even if you hire someone to help with the bookkeeping and accounting duties, you still need to maintain an organizational system to keep the business running smoothly. At minimum, you need a way to get documents and information to your bookkeeper securely and quickly so they can file it away.
If you do not have a bookkeeper, devising the organizational system yourself may feel overwhelming. Keep the system as simple as possible while still being effective. Whether you keep paper or digital records, make sure everything is labeled and that all documents are filed promptly.
It’s important for business owners to keep a close eye on financial transactions and stay current on paperwork and payments. A solid bookkeeping routine and organizational system can ensure you know how your business is doing at all times, making it easier to course correct if necessary.
Cameron Ward is an entrepreneur and an MBA student. She created bizwealthbuilder.com to provide insight and advice to those who aspire to succeed in owning a business. The website provides business budgeting and funding information to help business owners streamline their financial management through easy-to-implement processes and platforms so that they can stick to the business of running their business