Every small business needs to be on top of its numbers. By learning bookkeeping and accounting basics, you can ensure you have the necessary skills to handle your accounts. You can also make use of accounting software solutions to make your financial operations run much more smoothly. Another way of finding solutions to accounting issues is to hire a professional accountant. Read on to find out more.
The fundamentals of small business accounting begin with keeping and organising records. You then have the necessary details for handling your end of year accounts, payroll records, tax preparation, and all other elements of small business bookkeeping. Your accounting records need to include elements like:
- Income and Expenditure Records: These include all receipts for sales and purchases, as well as items like up-to-date bank statements.
- Floating Assets Records: This record includes all unsold stock and uncompleted work at the end of the tax year.
- Fixed Assets Records: These include data about the equipment, property, and other fixed assets your business owns.
Hiring an Accountant
Small business accounting isn’t only about bookkeeping. If you want to run a successful company, you need to ensure you’re on top of your company’s finances at every stage of your business operations, from forming your business plan to obtaining loans to expand. By hiring a professional accountant, he or she can make life easier for you at every step of the way.
Employing an accountant allows you to have more time to focus on other elements of your business. Also, the more qualified your accountant is, the more he or she will be able to improve your financials. For instance, a Certified Public Accountant is the crème de la crème of accounting roles. CPAs need to pass the rigorous CPA exam via studying complex CPA exam preparation materials, as well as keep up-to-date with all the latest legalities, rules, and regulations. A professional accountant can abet your business by:
- Giving advice on your business plan.
- Helping with your finances by measuring and analysing key metrics.
- Using the latest accounting software to produce tables and charts that enable you to understand your business’s current financial situation quickly and simply.
You don’t necessarily have to employ an accountant full-time. A couple of hours of an accountant’s time each week should be sufficient for most small businesses. You may be worried about the extra expense of hiring an accountant, but it will save you money in the long run.
What accounting software should you use?
If you employ a professional accountant, he or she can give you advice on the best accounting software to use for your small business. If you’re doing the accounting yourself, you need to select the right software and have a good understanding of how to use it effectively. There is a plethora of excellent accounting software tools from which you can choose. When deciding which software to use, it’s important to:
- Identify Your Needs. Do you need a platform that enables you to track receipts and sales taxes, or one that allows you to track inventory? Prioritise such needs from the most important to the least essential.
- Identify the Features You Need. With different software coming with various flashy features, it’s easy to lose sight of the features you actually require. Research the features you need and stick to them.
- Set a Budget. Identify how much you can afford to spend on accounting software, so you don’t spend too much time evaluating software outside of your budget.
- Be Realistic About Your Business Growth. By knowing the rate of growth for your company, you can choose software that can grow as your business scales up.