Managing business and maintaining accounting and bookkeeping in an organized way is a difficult process. Especially small business and start-up business faces difficulties in managing business accounting.
It is not that every small business and start-up business reaches success. Moreover, only 30% of businesses remain in their business after 10 years of launch. It is more important to have e dedicated business flow to succeed in business.
Here are the tips to manage your accounting and bookkeeping effectively.
Accounting tips for small businesses and start-ups
To have healthy financial management businesses need to follow the below-mentioned accounting process.
Manage personal and business expenses separately
Most businesses are confused with business and personal expenses. The first step to be followed by them is, to create a business bank account for your small or start-up business. A business bank account can be created after receiving its EIN (Employer Identification Number). You can benefit more when you create a business account over a personal bank account, such as
- Tracking made easy and verified business expenditures to take benefit of tax deductions.
- Providing personal liability security by upholding business budgets distinct from personal budgets.
- Offering the line of credit that the business can utilize to protect cash gaps.
As a business, it is healthy for you to open a credit card account, savings account, merchant services account, and checking account, this will permit your business to accept both credit and debit card transactions from various customers.
Use bookkeeping software or bookkeeper
Sometimes you may feel as if you can manage your business accounting and bookkeeping on your own. But once your start growing, it’s really hard for you to focus on it.
Bookkeeping is the process of tracking all your business income and expenses in an organized way. It is a critical element of the business, and you must have it in an organized way to make suitable business decisions.
It’s true, that most business owners are not skilled in accounting. They need to hire an accountant. It might be time-consuming and costs a little bit expensive for business. So, they can try using some simple accounting software as it automates the process of bookkeeping, by eliminating the time and possibilities of error. Further, you can manage all your financial statements on your own without dependency. Trying accounting software to manage a business is a suitable idea for small businesses and start-up businesses.
Develop a budget
The first step when preparing your business plan is arriving with an earnings projection and a list of expected expenses, and then comparing that budget to actual expenditures and earnings. So, for a healthy business plan, you need organized accounting and bookkeeping.
Note: Check out myplan for business budgeting and financial forecasting software.
Bypass cash transactions whenever possible
To maintain the business account more healthily, avoid cash transactions on hand. The reason behind this is, that this type of cash is difficult to track and you might miss any of the payments. This makes it hard for you to manage the business account.
Also, an expense that is paid in cash might find hard for people to track and sometimes feel tricky and time-consuming to reconcile the outgoing cash receipts. So, always it is preferred to use digital payments, online cheques, or online banking services so that businesses can track all these business expenses effectively.
Manage the solid tracking of accounts payable and accounts receivable
To track and manage your business account, people need to track their accounts payable and receivable continuously.
Accounts Receivable is nothing but the balance amount from the customer side after the customer receives the product or service from the firm. In this case, the amount is not paid by the customers. On the balance sheet, the accounts receivable is mentioned as a current asset. With a suitable receivable tracking method, it assists businessers to track and manage when their customers have paid, and who are all not paid with their outstanding payments. Also, a businesser can get paid faster from both profitable customers and non-profitable customers. With this, you can maintain a smooth cash flow for every month and will improve your financial health metrics.
Accounts payable are nothing but short-term liabilities, which are required to be observed within a particular date. Any late payments will draw extra charges, in the state of interest and subsequent payment charges. Further, this late payment might create misery between both groups and slowly might affect the business credibility, which results in supply disruption.
So, maintaining the accounts payable will assist businessers to make sure that more business is not being delayed or duplicated on the supplier payments.
Accurate business records
As a start-up business or small business recordkeeping is more important. There is free accounting software that automates your process of recordkeeping and can digitally store financial records. So, you can easily record the cash, period, location, and purpose of the business transaction when you declare expenses as tax deductions.
Pick the suitable accounting method
It is essential for a business to choose the type of accounting method that has to proceed with. It will take your business a long way. Further, this will deliver a uniform accounting method for tax objectives.
One of the methods called cash basis accounting can be more direct to handle for small businesses. It is because revenue is documented when you receive payment. Also, expenditures are subtracted when the cash comes out of your business account.
Accrual accounting documents your business sales, when a service is offered, or when the goods are shipped. In a retail business setting, a sale is determined on purchase period, and in different industries revenue may not be documented after the sales get completed for more weeks or even months. Thus, this type of method needs double-entry bookkeeping. As accrual accounting takes a more amount of time, it shows a better view of company health.
Manage books up to date without delay
To estimate the financial health of your business, it is necessary to update the books on time. Invoice capturing and receipt automation is one of the best ways to make sure that books are consistently updated. While using the accounting software, don’t fail to link back your bank account with the accounting software.
Optimize AP terms and invoicing
To carry on to cash for a long way for your business, carry the benefit of credit terms from essential suppliers. Make sure to pay your bills on a schedule, which will help you to boost your cash flow, when having the right chance, pay before with sellers, who might offer a discount if you pay on or before time. Encourage customers and do more to make the payment. This might feel hard, following so you have a great benefit.
As a small business owner, when you utilize the accounting software for small businesses, you can automate your process of invoicing, by sending bills automatically without delay, and can have follow-up reminders that could also control your outstanding invoices from stacking up.
Always have an eye on high-cost expenses
Inventory and labor cost some of the huge expenses for most small businesses. Most start-ups and small businesses think of it as a pro tip, they will look for contractors to work for them and will pay them based on working hours. Hiring an accountant on a monthly-based salary is comparatively looks expensive to contractor accountant fees. It works and reduces the expense for businesses.
Maintain inventory records
Inventory is the heart of businesses like retailers. When it comes to inventory, managing them is a hard process. There are lots of key elements to track, such as — an amount that is lost to obsolete inventory, inventory turnover ratio, inventory write-off, inventory shrinkage, inventory write-down, days in inventory, and more. So, it is also important to have an eye on inventory. Using mybooks for inventory management is a great choice. It holds the best features to make business efficient.
Simple Accounting Software
myBooks is basically a cloud-based accounting solution that is designed to serve midsize and small businesses. It covers a wide range of audience, including freelancers, entrepreneurs, small IT and financial companies, small business owners, and solo accountants as well. mybooks Accounting Software has amazing accounting tools for the management of routine business expenses, invoices, bills, and many other financial transactions.
Here we have listed a few important features that rate it high among much other competitive business account management software in the market:
With traditional procedures, accounting management can be a daunting task; especially for medium and small businesses that cannot hire a special team for financial health. Well, Easy Accounting Software gives them more peace of mind so that they can focus on other essential tasks of their business.
This amazing financial book-keeping software tool provides enhanced security for all your accounts and financial transactions. You can rely on this tool as it makes accounting management safe at every level.
Another amazing feature of myBooks is its ability to manage multi-currency transactions. It means you need not restrict your business to the specific demographic area; rather, you can scale it overseas without worrying about financial management.
How can we forget to talk about the interactive dashboard? mybooks Accounting Software tool offers handy tools for analytics that can make your accounting much more convenient and reliable. Moreover, these insights are easier to understand.
Easy Configuration and Setup:
There is no need to gain special skills to manage and use this software. It is designed for non-tech-savvy people. Anyone can configure and set up this software by following a few simple steps, and soon it will be ready to handle all your accounting requirements.
The glance of mybooks features
- Organized bookkeeping
- Inventory tracking with a low stock alert
- Design in a way to be used by both accountants and non-accountants
- Payment reminders
- Accounts payable and receivable
- Accurate business records
- Different templates for invoicing, estimation, proforma invoice, and more
- TDS payment
- Multi-business management
- Multi-user role access
- And more
In short, these incredible features of myBooks can help you to manage your business accounting needs with ease. It is the right time to get this affordable and simple accounting software for small business to handle all their financial transactions online.
The bottom line
Accounting is the most valuable way to display the financial health of the business. Whether you are running a small business or own a big band; it is always important to make efforts to keep track of profits, losses, and expenses.
Many business owners prefer to hire a team of experts to manage their financial health; however, manual efforts often lead to some unavoidable errors. Moreover, when your business starts growing, it undergoes some complex scenarios with more customers, gigantic ledger records, and a huge operational budget. In this scenario, it is important to find an automated solution to manage your business account.
Although the market is loaded with plenty of software tools that can help you manage all the accounting details, it is always recommended to go ahead with the most reliable and trustworthy solution. One of the best solutions to handle all your accounting needs with higher security levels is myBooks by Zetran. This Simple Accounting Software is loaded with plenty of amazing features. With leading technology, you will find it safe and reliable to take your business on the path of growth.
Can I do my own accounting for my business?
If you are a startup company or a small business owner, you may handle all your business accounts and bookkeeping, by saving yourself time and money. But when your business grows, it is hard for people to handle.
As a small business owner, you can go for suitable accounting software like mybooks, but when the business grows, it is hard for you to manage your business accounts separately, as you need assistance.
How do business accounts work?
The business bank account will operate similar to the personal checking and savings account, but the business accounts will hold some enhanced features which are specially designed for business transactions.
What are the benefits of a business account?
- Business accounts will act as a protecting shell for you and your business.
- Easy to handle your business expense
- Lower spending time for tax filing and other tax-related processes
- Having and managing a business account will make your business more professional.
What are the types of business bank accounts?
Here are the types of business bank accounts that businesses manage.
- Business checking accounts
- Business savings accounts
- Money Market
- Certificate of Deposit
- Merchant Account
- Trust Account