To keep a smooth-sailing business is no laughing matter. It’s not enough for one to be determined; it is equally important to be able to set that determination around strategic planning and logical business decisions. To help you out, here are 7 best practices in accounting for making sure your enterprise’s finances stay on track:
1) Set a routine of closing your books and stick to it
The practice of closing your books at the end of each month allows you to see how your business performed for a specific period of time. This will enable you to compare monthly performance and determine what works, what has to be stopped, and what practices can be continued.
2) Reconcile your bank account regularly
Reconciling your bank account is a standard practice and for a very good reason. Knowing your updated balance and making sure they match your books helps you plan for the month/s ahead.
3) Pay your bills on time
Paying your bills on time will not only leave you to worry-free but will also help you maintain good credit standing with suppliers and investors. A good relationship will come in handy when certain business moves like an expansion will require more funding or lenient payment terms. This will also help you save in the long run since there is minimal to no interest and overdue balances.
4) Submit and pay your tax liabilities at least two weeks before the deadline (income tax and payroll taxes)
These are obligations that you have to pay whether you like it or not. Creating a separate account for your tax liabilities will be helpful in remitting payments on time.
5) Hire smartly
Hiring smartly is knowing when during the year you should hire, and knowing what added value each new team member brings to the table. A clear documentation from job descriptions to accountabilities, time sheets, and compensation & benefits is a must as taking care of employees is an investment, too.
6) Monitor your receivables
While closing another deal is always good news, keep in mind that a sale is not a sale until money is exchanged. Monitoring your receivables gives you a great advantage, as it provides an overview of the goings on in your company, helping you project and manage potential crises and opportunities.
7) Hire a reputable accounting firm
Whether you do your own bookkeeping or have someone do it for you, it pays to have a reputable accounting firm on your side for a good check and balance.
Before you start a business, know that it also is hard work. The good news is there really are countless tools you can keep in your arsenal to make things easier to manage.
Simply put, running your own business is definitely challenging but is also fun–you’re now your own boss after all!