18 Nov 2020
Running a business is a complex task. It’s not only making and selling a product or a service. It’s about generating and maintaining resources, and being prepared to meet all surprises and failures. Managing finances requires the expertise of accountants. Assets, revenues, liabilities and expenses and such factors are what need to be balanced in order to sustain your business. Here are 4 accounting tips that can help your business thrive.
The most basic element in managing the finances is to keep everything in record. business accountants adelaide maintain financial statements, debit and credit entries, books and ledgers. Maintaining your records helps in making better assessments which can aid in decision making. You can not make decisions regarding any purchases, investments, expenses and much more without looking at these records as they tell you what came and went, and what is coming and going (present and future). Keeping a track of the cash flow like this will help you be prepared financially with a back up. Knowing future expenses and anticipated revenue can help make better future plans which don’t come to hit you in the back afterwards. Accountants can manually maintain these accounts, keep spreadsheets, or even operate a cloud based accounting system.
There will be day to day running expenses which include reimbursements to the staff too. Having a petty cash account helps in maintaining separate finances for these daily and abrupt expenses. This will ensure that you have constant back up and cushioning. Your basic revenue and finances remain untouched and organized. This keeps everything systematically sound. The flow of this petty cash must also be accounted for. This will be done separately and thus help assess overall finances better. You can keep adding to this from your main account. This will keep the burden off of either of these accounts and maintain a balance.
Every citizen and every business has to pay tax. It’s an obligation, a responsibility. Maintain a separate account for tax money. Being organized this way will help in being ready to pay taxes as they are due. Again, keeping all other finances like revenue, expenses and taxes separately will maintain an order. You can be more organized in your financial dealings and keep a track on the flow of money. Add it on your business policy to set aside a fixed percentage of the tax money, before it is due, from the revenue your business generates. Keeping separate accounts helps prevent mishaps. All personal finances should be kept apart from business finances. Within business finances stay organized by maintaining separate expenses, revenue and taxes accounts.
Managing Receipts and Invoices
A part of accounting records is managing receipts and invoices. All transactions should generate a receipt or an invoice. These should be categorized and then handed over to accountants so they can maintain a record. This even applies to cloud accounting. They should be arranged as per the type of the expense. Such a detailed account will eventually help manage finances more efficiently.