The two main rules of business accounting are:
1. Monitor and evaluate your financial reports
2. Collect payments and keep track of your expenses
Implementing and maintaining the habits listed in this article will help you stay on top of things.
Track and Sort all Business Expense Receipts. Keep it simple and be consistent. There are apps and software options to help automate this process.
Collect All Applicable Tax. Figure out the appropriate tax percentage per location and industry so you can add it to your products and services.
Use an All in One Payment Solution. Limiting payment options will make record keeping easier in the long run. When you accept everything (cash, checks, credit cards, mobile pay, PayPal, etc) reconciling accounts can be a nightmare. Using a gateway platform, like Stripe, can make the process simpler for you and your customers.
Keep all Contribution and Donation Receipts. These are the most contested deductions so keep original and physical copies of these receipts as well as a digital backup.
Create a Fool-Proof Invoicing Process. Choose a reliable invoicing system that will have all of the features that you need while also having the ability to scale for growth. Make sure the software is maintained on secure services and that it’s checked routinely for possible bugs and breaches.
Pay Attention to Payroll. Payroll is one of the most complicated parts of owning a business and the most complicated part of business accounting. It’s best to hire someone but at the very least, use accounting software.
Double Back, Triple Check. Cross-check all of your files and documents before handing it over to the accounting. You should be pulling your profit and loss statements at least once a month. So much can change if you only look at the quarterly
It’s always a good idea to keep business and personal accounts separate. Keeping your accounts separate helps you stay organized and it makes it easier to find missing receipts and documents. Business accounting will come with some hurdles but a good strategy makes everything easier.