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Five top small business accounting tips

If you run a small business, you no doubt understand the importance of keeping good accounts. Doing so helps you to manage cash flow and stay on the right side of the taxman. It also helps you to ensure that all of the services and products you offer are actually making you a profit, rather than losing you money.

Staying on top of your finances brings many benefits. However, with so much to do each day, it can sometimes be difficult to do so.

Fortunately, there are a few simple things you can do to make things easier. Here are the best of them:

1. Do your accounts every day

First thing in the morning or last thing at night is a good time for most company owners to do their accounts. Once you get into the routine, it should take no more than 15 to 30 minutes each day. If you take this approach, things will not get missed.

In addition, at any stage, you can pull off accurate profit and loss reports. These can help you to make important business decisions and do so quickly. For example, if you are offered a big contract, a few simple clicks of a button will tell you if you have the capital to buy the raw materials to fulfil that order. If you do, you can bid for the work.

2. Chase debts straight away

Cash flow is a huge issue for companies. Many profitable companies that end up going out of business do so simply because people do not pay them on time.

Staying on top of your invoicing is vital. You need to send them out promptly and have a sturdy debt-chasing process in place. Most importantly of all, you need to implement those processes. Doing so will drastically improve your bank balance and, therefore, your cash flow.

3. Regularly review the financial health of your company

Once a week or month, pull off your financial reports and go through them. That way, if there are problems on the horizon, you will see them early enough to do something about them.

4. Take advantage of technology

There are some great tools available to help you to keep good accounts. Having an App on your phone that allows you to keep track of business expenses while on the road is a fine example of this. You can pass this information onto your accountant or accounts team when you get back into the office.

5. Hire a good accountant

Accountants can help any business to be more profitable and run more efficiently. By hiring one, you are tapping into a huge pool of expertise and getting low-cost access to the best accountancy software and tools.

Posted by Peter
February 27, 2016

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