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Keeping track of your accounting early and with the help of a professional will help you in the end.
Record Everything
One of the most important steps in establishing a solid accounting system for your business is to record everything. This means that you need to keep track of all inventory and sales, as well as any payments received or made by your company.
Recording every transaction will help ensure that you’re able to reconcile your books at the end of each month, which is one of the main functions performed by bookkeeping software like QuickBooks.
Allowing transactions to pile up without being recorded can make it difficult or impossible for you to properly report them later on, which can lead to problems with taxes and other financial obligations. Furthermore, recording every purchase allows you to monitor how much inventory you have on hand so that there aren’t surprises when it comes time for an audit or tax return filing (which are both very costly if they’re done incorrectly).
Set Up a Separate Business Account
As a small business owner, you’ll want to keep your personal finances and business finances separate. This is easy to do with online banking. You can set up a login and password for your small business account, and link it as an additional bank account in the “My Accounts” section of online banking.
To make sure that all of your transactions are properly categorised so that they can be tracked, set up automatic payments from your business account into sub-accounts for each asset or expense type (e.g., cash receipts).
Keep Receipts and Payslips
You should keep all your receipts and payslips in a safe place, preferably in a fireproof box. It is important to keep them for at least 5 years because they may be needed by the tax office if there is an audit or if you have to complete your tax return.
Do Your Accounts Regularly
It’s important to do your accounts regularly, even if you don’t have the time. If you wait until the end of the year, it could cause problems and affect your tax return. Try to set aside a few hours each month to do this task.
If you don’t have the time available or are worried about getting behind with other tasks, use an accountant or bookkeeping service that can help out with these things for you.
Have a Regular Business Budget
A business budget is a plan for your future. It’s the best way to determine how much money you need to make, and what expenses will be necessary in order to pay off debts, expand your company and make improvements.
A good budget is an essential tool for any entrepreneur or small business owner because it allows you to see where your money is going each month.
A budget can help you avoid unexpected costs such as bad debt collections or late payments from vendors by allowing you time to plan ahead for such possibilities instead of dealing with them on an emergency basis when they occur.
Pay Estimated Taxes Quarterly to Avoid Penalties
The IRS recommends that you pay estimated taxes quarterly to avoid penalties. Estimated taxes are taxes that you pay on income that has not been withheld by your employer. You must make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.
If you get paid once per month, this means paying 25% of your total annual income for the year in four equal payments due on April 17th, June 15th, September 17th and January 16th each year.
If you get paid twice per month (bi-weekly), this means paying 24% of your total annual income for the year in 26 equal payments due every other Friday throughout the year starting May 1st or November 1st (whichever comes first).
Get an Accountant
Having an accountant can help you with a lot of things, but most importantly with the books. Your books are the records of your business and without them, it’s hard to run a business. You need someone who knows how to keep these records and will do it for you so that you’re not spending all your time on it.
Accountants can also answer any questions you have about your finances or taxes as well as offer suggestions on what steps to take next if there’s something wrong with your books.
Keeping Track of your Accounting Early and With the Help of a Professional Will Help You in the End
Failing to keep track of your accounting early and with the help of professionals such as SCK Accountants in Dublin will only leave you in a tight spot. You might think that it’s not too important or that you can do it yourself, but here are some reasons why this is not true:
- If something goes wrong, it will be much harder to fix later on down the road
- It takes time away from running your business and growing it
- You don’t have all the information needed to make educated decisions
Conclusion
I hope these tips are helpful to you as a small business owner or entrepreneur. You don’t have to be an accountant but it always helps to have someone who can help you out when things get too overwhelming.
Keep these tips in mind when starting your business and remember that they won’t just save time and money, but will also make the process more enjoyable!
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