Taking control of the financial operations of your small business is the first big step in making sure your practices are set up to succeed. With accurate and detailed financial planning and assistance, you can set long term plans for expansion and growth within your field. While small business accounting can seem like a big task, following the right steps can make the overall process enjoyable and highly profitable for the operations of your business.
1. Implement A Risk Management Program
The first rule of operating a small business is separating your finances. Not only will this give you transparency in the incoming and outgoings, but it will enable you to protect your personal finances should anything happen to your business.
Opening A Business Account
Opening a business account is an important step, with putting your personal financial particulars aside, you are going to need to select a bank and account type that has user-friendly features for your small business, for example, you are going to need services and fees that enable you to manage your finances on a day-to-day basis. This will enable you to accurately see when invoices are being paid and to manage and foresee your taxes for the end of the year.
Some key features to look for in a bank account best suited to small businesses are:
- Business checking account and business savings account.
- Monthly servicing fees and ways to waive them.
- Included transaction fees.
- Wiring and transactional allowances.
- Cash deposit limits and restrictions.
- ATM access and fees.
- Online and mobile banking capabilities.
2. Understand Your Business’s Financial Needs
Getting to know the financial particulars of your small business can seem like a complex and daunting task. But in actual fact, understanding these key terms can help you to recognise how you are progressing, what you are achieving and how close you are to reaching your personal goals. This is helpful knowledge for when you enlist the services of a professional small business accounting service, you can then work with them in understanding your operations.Gross Revenue
This is the sum of all funds you have received from clients in exchange for your products or services – it’s important to note this is before any deductions are made, such as tax, and the cost of the goods sold.
This includes anything that intercepts your gross income, for example:
- Cost of materials for goods sold
- Interest on debt
- Operating expenses
Often referred to as ‘the bottom line,’ your net profit is what is left over after you have deducted your expenses from your gross revenue. When this number is positive, it means your business is making profits.
Even if your business is profitable, keeping enough ‘cash on hand’ is crucial to the operations involved in running a successful small business. Keeping adequate funds in the bank to pay bills and your employees is an important balancing exercise for your company. The more you understand your financial particulars, the easier and more straightforward this balance becomes.
3. Find An Experienced Accountant
The next step, and arguably the most important in our guide to managing the finances of your small business, is finding an affordable and experienced small business accountant. Because this job traditionally involves a lot of paperwork and a meticulous eye for detail, working alongside a professional will guarantee you are successfully adapting and sustainably growing your business.
From helping you fulfil your small businesses taxes – and understanding them, to tracking your revenue, expenses and profitability, you can rest assured you are in capable hands. So you can focus on the other areas of your business, enlisting the services of a specialist financial accounting group such as Consol will ensure you are implementing the legal regularities that are essential for the running of your business. Consol Group will assign an accountant to you that has relevant experience and expert knowledge in your specific area of operation, answering any questions you may have while providing you with unparalleled support and guidance for all of your financial requirements.
4. Utilise The Latest Technology
A specialist small business accounting group will be working alongside the very best in financial technology. With partners like Xero and SmartPayroll, you can view, manage and facilitate your small business in the easiest way possible.
With mobile-friendly applications and a simple layout, paying your staff, invoices and outgoings can be done with the tap of a finger. Another one of the great benefits of working with intelligent software systems like Xero and Smartpayroll is the affordability of the service they provide. In between the time you save yourself billing, invoicing and making payments, these two systems, along with an experienced accountant will take care of the technical and legal requirements for you.
To learn more about how working with a small business accountant and these unique software systems can benefit the financial operations of your business, get in touch with the team at Consol today. We are an experienced group of accounting professionals who specialise in every aspect of your small business financials.