If you’re just getting started with your small business, chances are, you wear many hats. One of those hats is playing an accountant.
The trouble is, most people who become their own boss don’t start a finance-related company. That means you’re likely to find yourself feeling a little lost when it comes to the finances of your business.
If you aren’t ready to hire someone to do all the accounting for you, follow these five tips, and you will be well on your way to becoming the master of your own finances.
Get Help When You Need it
There are some great tips on this list, but no matter how great they are, you’re probably going to need help every once in a while.
It can really pay to seek the help of a tax professional throughout the year when you could use a little help figuring out how to maximize your deductions.
The bottom line is, if you need help, don’t be afraid to ask.
Keep Your Records as Accurate as Possible
You probably already know you need to keep your records as accurate as possible, but what exactly does that mean?
It means making sure all records that relate to your business are correct, it means making sure you know what records to keep, and it also means keeping them as up-to-date as possible.
Related Posts on Accounting and Maintaining Records:
- Classification of Accounts: Personal & Real & Nominal
- The Golden Rules of Accounting – 3 Main Principles
- Journal Entries in Accounting: Basics
Don’t pile documents into a box with the intent of sorting through it all later. Make time each and every day to properly file all of your records so they are easy to find when the time comes.
Keep Every Receipt and Business Bill
There are a lot of records to keep track of, and those records include receipts. It might surprise you that bills, like car payments, internet costs, and cell phone bills, should be kept as well.
Expenses associated with your business are often tax-deductible. When you keep track of every bill and payment you make, you can maximize your deductions at the end of the year.
To be clear, keeping track of receipts and bills doesn’t mean putting them in a box with the rest of your records. It means organizing them as soon as you get them. Fortunately, there are many great mobile scanning apps that make keeping track of receipts easy.
Get Used to Invoicing
Invoicing is the best way to keep track of your income. That means sending electronic invoices for services, but it also includes bills that are sent for products that are being purchased.
It pays to know how to do invoicing right. Good invoices include information like:
Your business’s name and contact information
The name and personal information of the customer
Invoice details, including the date, invoice number, and due date
The amount, and how it is being paid
There are other things you can add to your invoice to customize it just for your business. For example, you may want to include a table, if multiple products or services were purchased. In addition, you may want to include a personal message at the end of the invoice.
You can send your own invoices using programs like Microsoft Word and Excel, but there are also online programs that make sending and sorting your invoices easy.
Know When and How to Pay Your Taxes
Keeping track of your own finances is a great way to ensure precious money isn’t falling through the cracks, but it also makes tax time a lot easier.
That is, as long as you know when and how to pay your taxes. That includes knowing the quarterly tax deadline dates, as well as the local IRS office that corresponds to your location.
If you own your own business, you will have to make payments to the IRS and the state. One way to make sure everything works out in your favor is to collect taxes at the time of the sale. That way, you can pay your quarterly taxes without incurring delayed tax payment penalties by paying a lump sum at a later time.
Keeping track of your own finances takes time, but it’s time well spent. With the tips on this list, you can stay on top of your income, your expenses, and your taxes, so your business can continue to be successful in the coming year without any financial or legal issues.