If you’re the owner of a small or midsize business, your to-do list never ends. There are customers to serve, projects to navigate, and employees to manage. And that’s just the tip of the iceberg.
There’s another checklist to think about, too—the one that includes everything you have to do to keep the financial side of your business in order.
Dealing with your financials on top of everything else can be particularly wearisome, even if you’re a rock star at multitasking. To help you get (and stay) ahead of the game on your bills, invoices, and the like, here are five simple accounting tips to consider.
5 Important Accounting Tips
- Choose accounting software that is right for your business.
Most businesses start out with basic accounting software, which typically works just fine. But when a business outgrows its software, inefficiencies can quickly crop up. If your accounting software isn’t giving you what you need, don’t settle. You want software that can deliver the level of support you need—whether that’s data analysis or an industry-specific function—today and tomorrow.
Before you choose accounting software for your business, make sure you’re aware of its capabilities. Don’t skip the training, either. Knowing what an accounting software platform is—and isn’t—capable of can help you determine if it’s truly right for you.
- Keep your records accurate and organized.
When the demands of your business are in full swing, it can be easy to let your records fall into disarray. If this happens, you could find yourself stuck with an expensive and time-consuming cleanup when December rolls around. Developing a filing system, implementing record-retention guidelines, and backing up your files are all good strategies for keeping your records accurate and organized—and helping you avoid an end-of-the-year headache.
- Develop a month-end closing process.
Timely financial information allows you to make better business decisions, which is why it’s good practice to reconcile your bank accounts, monitor your cash flow, and review your accounting records on a monthly basis. Setting a date to close the previous month by can help you stay on track with these tasks. Whether your month-end close date is the 5th, 15th, or 30th, it will hold you accountable, and give you valuable insight into what’s really happening in your business.
- Consider outsourcing certain business functions.
Outsourcing can free you up to focus on managing your business and the initiatives that matter most to you. Many small and mid-size businesses choose to outsource payroll processing and information technology (IT) services. Several companies exist that handle a range of payroll processing needs at inexpensive rates, and, given the relatively recent rise of cyber criminals, strong IT controls are a must.
- Surround yourself with a solid network of professionals.
Trying to do it all can be overwhelming. Your CPA, banker, insurance agent, and other professional advisors can offer valuable support in running a successful business. Of course, choosing a professional advisor requires careful consideration. Not sure where to start? Your CPA, being familiar with your financial situation, can refer you to professional advisors who are best suited to your needs.
Following these five accounting tips can help you better manage—and perhaps even shorten—your lengthy to-do list. If you have questions about how any of these best practices could streamline your small or midsize business, please give me a call.