7 SMALL BUSINESS ACCOUNTING HACKS TO ENSURE YOUR SUCCESS
Introduction Because many small businesses are usually a one-man show, where the business owner does everything, there can be some major problems with small business accounting. Don’t worry, it doesn’t take a degree to help your small business succeed. However, you do need to learn some accounting hacks to get the most out of your time. Today we’ll present you our 7 most prized accounting hacks to help your small business succeed.
1. Separate Accounts You should use a separate bank account for your business to: • keep track of your revenue and expenses • ease tax document preparation • ensure proper financial discipline • create more accurate business forecast Without this separation, your small business will have major accounting and tax headaches.
2. Keep Great Records Whenever there is a purchase, payment, or late payment, you should record it in order to: • strategic thinking and planning • leadership • people management skills • financial literacy Without these, your business will suffer for a long time and then fail.
3. Use Good Invoicing You need to use great invoicing, and templates just won’t do. Get online invoicing software because: • • • •
you can create & send an invoice in under 1 minute you can’t lose them because everything’s on the cloud you’ll be able to avoid duplicates you can share invoicing responsibilities
Once you’ve switched to a good online invoicing software solution, you’ll see the difference in your business.
4. Determine Your Taxes As the owner of the business, you need to stay on top of your taxing responsibilities because: • it will help you avoid any taxation and legal problems • you may be eligible for tax benefits • your account will have an easier job Lacking appropriate taxation will kill your business sooner or later. Avoid legal and tax authority problems by getting ahead of your tax responsibilities now.
5. & Know the Deadlines You should never be late in filing your taxes, so first consider: • tax liabilities (tax returns and bills) cannot be overlooked • in order to file returns, you need good record keeping • don’t pay the annual lump sum for your taxes • instead, project future taxes and pay throughout the year Following these steps will help you to not just have good knowledge of your tax responsibilities, but also to take care that you meet deadlines and pay fully.
6. Make P&L Statements Profit & Loss (P&L) Statements are the most important finance document your business needs to have: • they provide snapshot of company’s finances • you can set it for weekly, monthly, quarterly or yearly • set them for logical periods in your business cycle • consistently create them to track your business finances Once you start seeing the snapshots by way of your P&Ls, you’ll be able to have a better idea of your finances.
7. Calculate Your Margins You should know your margins and should be constantly trying to improve them: • your margin requires calculating net profit margin (NPM) • NPM = (Revenue - Business Expenses) / Revenue • convert the answer into a percentage Knowing your NPM will help you understand where your business is and get you to consider how to improve the NPM.
The Best SME Hack There is one accounting and general hack that all small businesses must incorporate, and you’re already doing it: • learning That’s right, by educating yourself on parts of your business you are not very knowledgeable about, you’re already on your way to becoming a successful business person. Congratulations.
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7 Small Business Accounting Hacks to Ensure Your Success
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