Accounting is important for every business, whether big or small. However, it is more important for small businesses, as they are new to this and must know everything about accounting. Small businesses should focus on their accounting tasks; as if they do not manage their debt, marketing expenses, and receivables accurately then their business can sink even before growing. You can save your business by using some simple accounting tips. Have a look at the five accounting tricks that can help you to grow your small business.
Keep it simple
When you start with your accounting tasks, you must keep it simple. If it is your fist business, then you can run it in its simplest entity form, which is known as sole proprietorship. This type of ownership does not require any special filings or communication to the Lembaga Hasil Dalam Negeri Malaysia (LHDN) since this is not a separate legal entity. However, you as a individual tax payer still need to report your income from the business to the tax authority (Also see What to expect from your tax agent?).
DIY accounting vs. bookkeeper
Although, you may be ready to be the head of sales, marketing, and accounting of your company in order to slash prices, hiring a bookkeeper can help you (Also see 5 Reasons You Should Outsource Your Accounting Operation). This is because your company can grow when someone with deeper understanding and working is handling your books. So, decide whether you want to hire a bookkeeper or do it yourself.
Separate borrowed funds and receivable payments
Small businesses require loans or financial backing for their marketing campaigns, startup capital, and other preliminary things in their starting days. It is important to separate their income from any borrowed money. For this, small businesses can use software (Also see Is online accounting same as conventional accounting software?) in order to ensure that their loans do not mix with their receivables (Also see Benefits of Managing Your Accounts Receivable).
Specify daily expenses
You must focus on recording expenses of your company everyday or at least every week, instead of calculating the expenses in every 2 weeks for the purpose of payroll. This can help you know where your finances are going each week and thus you can know how much amount of money you will require in the approaching weeks.
Determine your minimum monthly revenue
You must know the minimum income you require every month. This can be done by accurately recording all the expenses and payments of your company regularly. You must have a strict target of the income that you need to earn every month.
Small businesses can take help from these accounting tips. These accounting tips can save a lot of money for small businesses or you can consider engaging an accounting service in Johor Bahru. Moreover, these accounting tips can help you keep the finances of your business stable and healthy every day of its operation.