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Best Accounting and Bookkeeping Tips for Small Businesses

Best Accounting and Bookkeeping Tips for Small Businesses

Best Accounting and Bookkeeping Tips for Small Businesses

Small business owners are sales leaders, managers and customer representatives, all rolled into one. They have to play many roles essential to business operations by themselves. Not only this, they might also take accounting and bookkeeping services on their own heads. Keeping the proper records can be very overwhelming for a small business owner who is already fulfilling so many roles.
 
An accounting and bookkeeping service can provide many services that are either very difficult or time consuming for ordinary business owners. These services agree that if you wish to succeed, you must take following points into careful consideration;
 

1. Familiarity with basic Jargon

There are some common accounting and bookkeeping terminologies that you must familiarize yourself with. These terminologies will help you in the long term. They will ensure that you will have enough clout to recognize and exploit them for your benefit. Following are some common terms;
 
Sale: A transaction for which you receive monetary compensation.
Expense: A transaction in which you pay out for a specific service or product.
Liability: An action which causes you to owe money to someone. For instance, a business loan.
Revenue: It is the income your business generates.
Receivables: It is the money your clients owe you, but they yet to pay.
 

2. Essential Documents Creation

After the familiarity with key terms, next step is knowing which documents are essential according to Accounts and Bookkeeping services. There are three basic documents which every business owner must prepare.
 
Balance Sheet: It is a document which shows what your business is worth. A balance sheet lists all the assets, liabilities and equities.
PLS Statement: A Profit Loss Statement shows the revenue and expenses of your business for a specific period of time.
Cash Flow Statement: This document determines where your cash is going. It lists the earnings, spendings and investments.
 

3. Separate Accounts

All accounting and bookkeeping services insist that you must maintain separation between business and personal expenses. Most small business owners disregard this policy. Hence, when the time comes for paying taxes, or audit, they are left scrambling which expenses were for what. The best way to maintain this separation is to keep separate bank accounts. An account dedicated to business expenses and profits, while another for your personal transactions.
 

4. Track all Expenses

Tracking every expense done in line of business is essential for the record keeping purposes. You can easily do so through your business account. However, if your business involves a lot of petty cash transactions, it becomes more difficult. If you diligently maintain the policy of cutting receipts for every small cash transaction, record keeping will become easier. By tracking expenses your dedicated accounting and bookkeeping services can more easily prepare your reports, and charge you significantly
less.
 

5. Saving Important Records

There are a few documents that you must keep safe and readily available in case of an emergency. You can keep them safe in hardcopies. But it is preferable to keep a digital record which is not easily lost. These documents must be kept efficiently organized and easily accessible. All accounting and bookkeeping service agencies agree following documents as essential to be kept safe;

I) Bank Statements
II) Credit Card Statements
III) Bills
IV) Receipts
V) Invoices
VI) Payments
VII) Sale Receipts
VIII) Deposit Slips
IX) Tax Returns
X) Payroll Documents
 

6. Keep Accurate Cash Flow Information

Every Accounting and Bookkeeping services for small businesses agree that accurate cash flow statements are extremely important. If you do have made a deal, and you are yet to receive the money, this is not profit. You might be made to wait for receivables longer than you would prefer. Without those payments, you might not be able to meet your bills and coming expenses. Cash Flow allows you to know if you are ready to commit your resources to large expenses.
 

7. Maintain Emergency Funds

Sometimes it happens that suddenly a need for large expenses arise. In such a case, you would find yourself taking loans from banks or friends to meet the funds requirement. All Bookkeeping and Accounting Services for small businesses advice you to maintain an emergency fund just for such a case. An emergency can come at any time. It can never be predicted. Taking precautions against them is just a wise course of action.
 

8. Suitable Accounting Method

There are two types of accounting methods most used by accounting and bookkeeping services;

Cash Basis Method: In this method, income is recorded when the cash is paid. Similarly, the expenses are recorded when the bill is paid. It gives you a real-time view of the cash flow.
 
Cash Accrual Method: In this method, the revenue is recorded regardless of when the cash is actually collected. This method is preferable for a business which deals with inventory and manufacturing.
 

9. Choosing Accounting and Bookkeeping Services Near Me

Proximity plays a big role for small businesses. If were in their place, I would choose an otherwise or online accounting and bookkeeping service near me. It will have numerous benefits. You will get easy access to the services and amenities offered by the company. You will also be able to deliver or receive hardcopy files easily.

Contact SG Inc. CPA is a provider of otherwise or Online Accounting and Bookkeeping Services in Dallas, Texas. We take pride in our efficiency. Take advantage of our dedication. We assure you your small business will grow to unfathomable heights in no time.