Running the finances of your small business can often be a big job, especially if you are managing all of your invoices, taxes and accounts on your own. Breaking your current system down into clear and precise steps will help you to compartmentalise your accounts and create a system that works seamlessly for your business.
Simplifying your finances can be easily achieved just by following these 8 steps:
1. Keep Track Of Your Expenses
Using technology to track your expenses is the easiest and most effective way to keep them safe and secure until it’s time to use them again. Storing receipts, invoices and pieces of paper is an outdated and inefficient way of managing your small business financials. We would recommend taking photos of your receipts on your phone as you go and saving the images to an external hard drive, or the cloud.
Once you get into the habit of taking pictures of your receipts you will never lose a piece of paper again, a habit that will also make your small business accountant’s job easier and more thorough. Providing your accountant with receipts in a digital format will ensure every invoice is accounted for and nothing is lost in the process.
2. Create An Accurate Invoicing System
Having a clear and concise invoicing system is the foundation of your small business financials. The more organized this system is, the easier it will be to focus on the other areas of your business you most enjoy.
Here are our top 4 tips for efficient invoicing:
- Keep accurate records, this makes invoicing easy.
- Decide how often you will invoice, regularity will help you to manage and predict cash flow.
- Define your accepted payment methods, this will make it easy for your clients to pay.
- Set up your invoice to have a ‘payment due date, this will ensure timely payment and communicate your expectations.
- Don’t forget the importance of human touch – give your clients a call and introduce yourself, people still want to know they are dealing with a fellow human.
3. Create A Payroll System
Unless you are working completely solo, you likely have more than one employee. Having employees means that you will need a secure payroll system. Setting this system up correctly is vital for the day-to-day operations of your business, which is why we would recommend consulting with a small business accountant.
Enlisting the services of a professional will save you time and money in the long run, and will ensure your small business is running smoothly from the beginning. A small business accountant will make sure your correct tax codes and direct debits are handled correctly and in a manageable, straightforward manner
4. Use Secure Software
Don’t be intimidated by new technology and software. In this day and age, there are an array of simple yet effective software systems that are designed for even the most inexperienced small business owner. Doing your research on systems that are recommended by other users will help you to make the right choice. Here is a checklist we recommend you go through when choosing a secure software system:
Check out the cost: Start by outlining your budget, this will give you a rough idea of what you can afford to spend and whether you want to invest in full accounting software or just a few features.
How user-friendly is the software?: Think about how many people you want to use your accounting software and how you would prefer to use it.
What security features does it offer?: Security is important, so choosing a software system that has encryption software installed and a 24/7 monitoring service is absolutely essential.
5. Know Your Tax Obligations
Knowing your tax obligations is one of the most important aspects of any small business. Filing these correctly and on time can either make or break your financial system. It’s good to know that not all software systems offer taxation services, which is why we would recommend you enlist the services of a small business accountant for your tax obligation requirements.
Seeking the help of a professional will provide you with up to date advice on your taxes, and can advise you on the appropriate tax to collect from your clients, as not every situation is the same.
6. Operate From A Separate Bank Account
Whether you are a freelancer or running a small business with employees, using your personal bank account is never a good idea. Separating your personal incomings and outgoings from your business will make your accounting particulars transparent and easier to manage.
Routinely reconciling your business bank account is another way to ensure you are avoiding mistakes and keeping on track with your accounts.
7. Maintain Accurate Records
Filing your expenses and checking them regularly is the best way to maintain accurate accounting records. Enlisting the services of a small business accountant will ensure your financials are cross-checked and stored correctly.
Maintaining accurate records will make every other aspect of your small business more efficient and straightforward, hugely benefiting its operation and management.
8. Weigh The Benefits Of Hiring A Small Business Accountant
Hiring the services of a small business accountant will give you the time you need to focus on the growth of your business. Let professionals take care of the New Zealand laws and regulations surrounding your accounting operations, so you can liaise with customers, manage staff and expand your business. The services of an experienced small business accountant will save you time, money and make sure you are prepared.
For all of your small business accounting services, give the team at Consol a call on 0800001851. We offer a free, comprehensive consultation that will answer all of your accounting queries.