We know business accounting isn’t always the most fun part of running your company. But it’s extremely important to your success.
For that reason, you want to do it as well as possible. You can cover part of that responsibility by working with a business accounting expert. But even after you do that, you’ll want to follow some best practices.
Here are a few ways to keep your business accounting on track.
Don’t neglect record-keeping
Electronic banking can be a wonderful aid to helping you stay on top of your business accounting. But you still need to keep solid records.
“Online banking can track simple debits and credits to your account. However, when it comes time to accurately state how things were spent or earned, separate bookkeeping records absolutely must be kept. The records need to track things like how cash was spent, what things were purchased via credit card, whether expense reimbursements were made to employees, etc.,” according to Patriot Software.
Keep business, personal accounts separate
It may be tempting, especially when you’re starting out, to keep commingle business and personal accounts. That’s not a good idea.
“Keeping your personal and professional finances completely separate makes tracking the flow of money a breeze. Plus, having a separate bank account also makes your life much easier when tax filing season rolls around. If your company is a sole proprietorship, you aren’t legally required to open a separate bank account for your business, but it is still strongly recommended that you do so,” according to MileIQ.
Learn to invoice properly
Staying on top of invoicing can help you in many ways.
“For most new business owners invoicing is an unfamiliar concept, but it’s necessary to record specific details about various transactions. They also prompt clients to make payments on time. Accurate invoicing can help you keep track of clients who consistently fail to pay within the agreed-upon period and can help you stay organized,” MileIQ points out.