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small business accounting tips

5 Time-Saving Small Business Accounting Tips

Part of being a small business owner, especially early on, is being a do-it-yourselfer in several areas you’re probably not familiar with. It can be difficult, and more importantly, it can suck vital hours out of your day. But accounting can be a particularly heavy drag on the unfamiliar.

Few aspects of running a company require such strict adherence to rules and regulations – and have such dire consequences for failing to do so – as accounting. Messing up just a few numbers can have you thinking your small business is sprinting toward profitability, when in reality it’s struggling to get by. It’s the only field outside of binary coding where a single extra zero can have immense repercussions.

That need for accuracy makes accounting a time-consuming task, making it a hefty burden on small business owners with already limited schedules. Thus, the best small business accounting tips need to serve two masters: They should help reduce time spent, but without sacrificing precision.

5 Small Business Accounting Tips

1. Investing in accounting software. This is the most obvious tip, but it’s the one that’ll give you the most time-saving bang for your buck. Studies are few and far between, and their results vary, but the general consensus is that accounting software can save even the smallest of businesses about three to five hours per week in accounting labor. It makes sense, given that accounting software helps you with a laundry list of to-dos, from organizing your expenses to bill prep to helping you prep 1099 forms. And the value keeps increasing as free options enter the market and established companies lower their basic-level product prices to compete. Intuit Quickbooks’ entry-level small business product is a mere $7/month, for instance. Of course, programs such as Wave and ZipBooks allow you to manage a few basic functions for zero cost.

2. Split your personal and business finances apart. First off, this tip is just good fiscal management. You should always have a separate business bank account and keep your finances separate simply for legal liability purposes, not to mention, writing a personal check for a company-related purposes looks unprofessional. But keeping your personal and corporate finances separate also will save you time when it comes to things such as recording expenses – no scratching your head over whether that Feb. 15 evening meal was business-related or a belated Valentine’s Day dinner with your spouse.

3. Track as you go. In the same vein, you shouldn’t ever be in the position where you’re digging several months back to figure out what expenses you had in February or what invoices were paid in March. No technology in the world will allow you to spend zerotime doing accounting and record-keeping work, so don’t let it pile up. Every week, make sure you’re keeping up with the numbers. Because it’s far easier and quicker to tackle things that are fresh in your mind than things that happened months ago.

4. Review your invoicing policies. In some ways, it makes a lot of sense to have loose invoicing policies and offer customers lenient credit policies. You need every advantage possible to secure sales and build relationships with vendors, because you certainly don’t have scale. But these policies can come back to bite you if you’re constantly having to run down delinquent accounts and unpaid invoices. That’s money out of your pocket, and time out of your day.

5. Hire a professional. The previous four tips are helpful in that they’ll not only save you time, but they’ll help you ensure more accurate records going forward. But they all lack one thing that you get in hiring a professional: subject-matter expertise. While you’ll certainly learn on the fly, there’s something to be said about harnessing decades of experience from professionals who know the ins and outs of the tax code and accounting regulations. McManamon & Co. has you covered. Our accountants specialize in small and midsize businesses – not only can we help you with tasks such as creating financial statements and maintaining records, but as you grow, we can even help you train your own dedicated accounting staff over the years.

You need to be in the business of growing your small business, especially in these formative years. Don’t let yourself get weighed down in managing the books. Give us a call at440.892.9088 or contact us online.

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