When running a small business, you have to make sure you stay focused on accounting. If you don’t manage debt, receivables, and marketing expenses accurately, your company will sink before it grows.
You can save your company by implementing simple bookkeeping strategies.
Weigh the options of bookkeeper vs. DIY accounting.
Though entrepreneurs might feel ready to act as head of accounting, sales, and marketing at the same time to cut costs, it may help to hire a bookkeeper. It can help you to know someone with experience and deeper understanding is working on your books.
Keep accounts receivable payments separate from borrowed funds.
Small business owners need financial backing and/or loans for startup capital, marketing campaigns, and other initial things in the early days. To make sure the loans don’t appear in the receivables, use software that separates income from borrowed funds. Don’t lose sight of what is yours and what needs paying back.
Don’t allow clients to get away with not paying balances.
Seeing a large amount in the receivables column is a good thing, but the money doesn’t really count until it is in your bank account. Don’t let clients avoid regular payments.
Detail daily expenses so you can budget for the coming weeks.
It’s a good idea for business owners to keep records of everyday expenses they incur in the company. Instead of calculating expenses every two weeks for payroll purposes, focus on every day or every week.
Calculate a minimum monthly profit.
When planning how much it takes to keep a small business running, the numbers can get complicated. Devise an accurate system of expenses and regular obligations so you know exactly the minimum income you need every month.
Courtesy of BusinessBee
For more information contact Neikirk, Mahoney and Smith at 502-896-299
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