No Need to worry! Simplify Accounting by using some simple ways.
In setting up of new small business or owning one, the growth exceeds by effective accounting. Failing to do so can create unnecessary problems and obstacles that can slow down the functioning of the business. It also affects the growth of Business. So, simplify accounting of your small business.
Managing your accounting means you have to keep a check on all direct and indirect taxes, monitor and examine financial statements, record all cash flows(whether cash comes or go). As a small business owner you will handle a huge no of responsibilities and tasks, so keep calm and simplify accounting by following some ways.
Keep everything organized
1. Record and listed All Business Expense Receipts
It is not that much difficult to record all business expense receipts of day-to-day transactions. But keep this one consistent is the problem for many small-business owners. It’s much easier to adopt a habit that’s easy rather than one that’s complex.
Advancement in technology makes the recording of all business expense receipts easier and convenient. It becomes a very useful tool to simplify accounting. With technology, we are able to take a picture of each receipt and automatically record it. The expense tracking option in a cloud accounting software allows you to take a picture of your receipt and safely store it in the cloud. The simplicity of the process allows you to stay on track.
2. Collect and save all Contribution and Donation Receipts
Almost all Contribution and Donation receipts are 100 percent deductible, but it is important that you collect the receipts as a evidence in order to claim them on your taxes. Like all other direct and indirect expenses, donations and contributions should also be recorded in their own different category. Separate categories for separate expenses brings efficiency in records and provides an easy platform of work to the accountant. The easier you make their job, the less likely they are to oversee little details.
Get the benefit of Accounting Tools
3. Develop an effective Accounting System
Getting an Accounting system helps to organize the whole data and records in one place. More the organized work, fewer the headaches. Choosing the best suitable accounting system is very important, and a step towards simplifying accounting.
The first step in creating a reliable invoicing process. At the time of choosing the best system, it is important to keep in mind that system should have all of the features and integrations.
4. Create a Payroll System
Unless you are a sole proprietor, it’s likely that your small business has employees. If so, then payroll is something that seems very simple, but in reality, is a very complicated content of small business.
There are two options to keep a track on the payroll. You can either use payroll software and handle it in-house or hire a payroll company to handle everything from calculating the correct withholdings and taxes to making the direct deposits to your employee’s bank accounts.
5. Use Software That’s Secure and effective
Security of data is a very important key. If you use a third-party for your accounting software, make sure that they keep your data safe and secure, while remaining 100 percent compliant. Make sure that the data you are sending to your accounting software is protected with 256-bit SSL encryption and the servers on which the software resides is constantly scanned for vulnerabilities.
Effectively Manage Reports
6. Maintain Concerned P&L Statements
The whole business depends on two most important components i.e.profit and loss. Keep a regular check on your P&L Statements, so that you can evaluate the growth on regular basis. As profit is the reward of risk-taking. There are many factors that are out of the business owner’s control. Keep a regular check on your P&L Statements, so that you can evaluate the growth on regular basis.P&L statement should include revenue, cost of goods sold, operating expenses, operating income, gross margin and net profit.
7. Always Be Increasing Your Gross Margins
COGS (cost of goods sold) is one of the most crucial aspects of a business. COGS applies to both physical products and services, so it applies to every small business out there. Tracking of COGS and works on lower down the cost is also important.
“Many small business owners focus on expenses and revenue when doing their accounting, losing track of what can really help to improve their growth and bottom line, which is increased gross margins.
8. Collect Applicable Taxes
This is pretty straight-forward for local businesses that are collecting payment in person, at the point of sale, but it can get tricky for service-based businesses that accept credit cards to collect payments from customers all over the country and world.
“Most platforms now make it easy for small business owners to collect the appropriate sales tax based on the location of the customer. You can also find out the ways to simply file the taxes.
9.Triple-Check All Records to Ensure Accuracy
Check all the records at least three times for accuracy. The more frequently you check your records the less likely there is a chance of confusion and ambiguity.
If you just record all of your expenses and don’t at least double check them for months, then this creates a lot of confusion and inaccuracy in them. Most small businesses are filing quarterly, so by triple-checking, all of your financial records will ensure you are handing off accurate numbers to your accountant every time. A little extra time spent triple-checking can prevent wasted time in the future.
So, these are the 9 Ways to Simplify Accounting in Your Small Business. check out more posts at IMPANIX.
Related Topic: Ways in which Business Structure Affects Taxes