If you’re new to running a small business, you may not have the budget yet for a professional accountant let alone an entire department. Accounting can seem daunting if you’re not accustomed to using any financial tracking systems or even doing your own personal budget at home.
Luckily, there are a lot of resources out there to assist you. The following suggestions will help you get organized and realize some best practices to get your small business’s accounting started right.
Teach yourself the basics. It may seem like an obvious first step, but many people try to wing it. Do yourself a big favour and take the time to learn the basics using an introductory book or online course that is a few hours in length. It might seem like accounting is straightforward, and you can figure it out as you go. While this may seem adequate to start, you’re likely to miss keeping track of something important, be unaware of holding onto certain receipts, or not take advantage of a money-saving trick.
Plus, having things set-up properly from the start will ensure you don’t have to waste resources with damage control later – and with financials, this could even mean trouble with the tax man.
Use current software. Whether you’re new to the game or even well-established, it’s good to take advantage of the latest technological resources to streamline your financials with the rest of your operations. Review and occasionally ask questions like is your company using the most advanced Sage software and taking advantage of cloud financial management capabilities?
Sage Intacct is an innovative AICPA-endorsed software in the area of enterprise resource planning that is designed to improve company performance along with handling day-to-day tasks. Sage Intacct includes:
- accounting
- cash management
- purchasing
- vendor management
- financial consolidation
- revenue recognition
- subscription billing
- contract management
- project accounting
- fund accounting
- inventory management
- financial reporting applications
Keep business growth in mind when implementing new software and utilize an ERP system that can scale and expand with you.
Consider hiring a temporary professional. When running a small business, it can feel like you’re spinning several plates, and you can’t dedicate too much time to any one before you need to run off again. Consider hiring a professional to help get you started on the right track with proper accounting and bookkeeping procedures. You can take over until you’re ready to hire someone full-time. Be sure to ask them advice on tax tips and tricks, too.
Consultants like IWI Consulting Group can help you adopt that enterprise resource planning system and customize it to suit your accounting and other small business management needs. They’ll assist with selecting a software solution like Sage Enterprise Management or Sage 300cloud and provide the learning and training resources you require.
Don’t mix personal and business. This is generally true in a few areas, and it’s especially true with accounting. Have separate cards, accounts, lines of credit, and loans for both. Don’t use your personal or your business card for the other’s purposes. Keep track of your purchases and expenses for both separately. You’ll be able to do your taxes and calculate deductions more easily if they’re not mixed together. And on that note, keep track of all your expenses.
Keep highly-detailed records. This goes for all departments. Write down everything. Having detailed inventory, orders, sales, and payroll records that don’t miss a thing will help with accounting.
Remember, it’s okay to ask for help, and hiring a professional or consultant, even for a few hours or days, can help tremendously, and it is well worth the relative low cost.