Whilst you may have the creative and development side of your business down pat, as they say, the numbers side of your business may not be your best area. Not everyone is comfortable with numbers, after all, but if you are running a business, sufficient knowledge of bookkeeping and accounting is essential. If you know how much profit and revenue your business is making and how much you spend on overheads and inventory, then you will have a better knowledge of how your business is performing and where it is going. But as mentioned, bookkeeping and accounting can be quite a challenge. Here, then, are the best tips for proper bookkeeping and accounting for your small business.
Why it’s important
If you have to make a major decision for your business, you need to be aware of all the figures and take them into consideration – particularly if the decision involves an expansion or an investment or the acquiring of financing or a loan. These kinds of decisions can cause a good deal of stress on the finances of your company, so knowing all that you can about your financial situation and circumstances can help you avoid any pitfalls and help you make the right decision.
The best tips for proper bookkeeping and accounting:
Keep up-to-date, accurate financial records
It is essential for you to know all the elements which make up your spending for the business, and you should make it a point to record all your transactions, regardless of if they’re big or small. When you get down to tax deductions as well as the calculation of your expenses, having this kind of information will help you save money and avoid the risk of prospective penalties or fines. You can rely on accounting software for this, which can help you simplify the accounting and bookkeeping process as well as track all your transactions.
Make sure to meet all legal regulations and requirements
Your business is under obligation to meet certain legal and financial requirements, and you need to be fully aware of these requirements. It would also be best if you know all the details regarding your tax liabilities because if you fail to know the details, this could result in some big fines. You should also know, for instance, that calculations for loans, salaries, and dividends should always be computed after taxes instead of before, particularly from the available profits. If you can deal with all the legal requirements pertaining to your business, this can also help your business become more cost-effective as it allows you to save on unnecessary costs. Fortunately, if you get an accountant or bookkeeper such as the central London accountants from Griffin Stone Moscrop & Co, they can take care of all the legal regulations and requirements related to the finances of your business as well.
Know the deadlines
One of your priorities as a business is to file your tax returns and pay all your bills on time, and you can make this process more manageable if your accounts are all in good order and up to date. If you have higher than £81,000 turnover, you should also keep VAT returns per quarter on file, as this will help you make sure that you can meet the payment of all liabilities. You can even set this up as a direct debit from your business bank account, so you can avoid being penalised for non-compliance. At the end of the day, make sure you know all the deadlines and make them a priority for your business; this will help you both in the short- and long-term.