Is it tax time yet? No, but is this the only time when it is necessary to deal with your business finances? You will not be surprised if we tell you that tracking your finances daily helps your business grow and flourish. So postponing accounting or, what is worse, neglecting it, puts your income and business in general at risk. Accounting is vital for small business owners, as a good tracking habit will help you achieve tremendous results and avoid consequences such as the mismanagement of your company.
If you want to know how to do bookkeeping for small business, this article is for you. Here, we will share our small business accounting tips and help make better financial decisions in the future.
Accounting basics to help your small business grow bigger
Recording financial transactions, reporting operations, analyzing and interpreting information is all called accounting. As a business owner you can decide how to build financial statements and control your books.
Here are the options:
- If your budget allows, you can hire a small business accountant.
- If you want to, or need to, manage it by yourself, you can use accounting software, e.g. QuickBooks, Xero, etc., and control your financial activities without putting all of your time and effort into it.
Now let’s consider some of the steps that you need to pay attention to when dealing with your business needs.
Collecting expense receipts in a bookkeeping system is necessary so that when tax season comes, you will not have to look at a pile of receipts, wondering whether they were personal or business related. Also you will be able to track your money flow and know what you spend money on and which expenses should be reduced.
Tracking expenses is especially easy with an accounting software, you can create, validate and reimburse them with just one click.
Bookkeeping system set-up
The financial health of a business depends greatly on how well you organize recording of your daily financial activities. Categorizing transactionsand reconciling bank statements can seem like torture, but there’s a way to avoid it, by delegating it to your accountant or bookkeper, or using accounting software!
Make sure you take care of the security of your business records. To do so, you must either find a reliable business accountant or transfer the information by yourself to an accounting software, which will guarantee your bank account and personal information remains secure.
A worry-free tax experience is possible with up-to-date bookkeeping and by following the next procedures regularly:
- Every single transaction should be recorded and categorized.
- Keep an eye out for any discrepancies that occur between your bank account and bookkeeping records and try to notice them right away.
- Each and every transaction should be accounted for in your books.
- Filing income tax reports and contractors and employees tax reports, as well as your small business tax rate, will depend on your business structure (LLC, S Corp, C Corp, sole proprietor) and which country and state you’re based in, so please obtain more specific information with your local regulations.
- Find out whether you’re eligible for any tax deductions.
Small business owners use the gross profit margin to measure the profitability of a single product. A gross margin calculation is quite simple:
Gross Profit Margin = Total Revenue – Cost of Goods Sold (COGS)
Your pricing model may go up or down. After determining the target goal of the gross profit margin, you can see how much Markup should be applied in order to get the revenue you want.
Jeff Wiener, an entrepreneur, shared his 19 Easy Ways to Increase Profit Margins for Your Small Business, where you can see interesting ideas on how to make your business more profitable.
If not you, then who? The answer is simple – accounting software!
Let’s say you are about to set up an online business or you have just launched one. Your team is likely to be small and the budget is also limited in order to deliver the best service to your future customers as well as stay profitable.
Using an accounting service might be costly even when it is accounting services for small business, because the manual work of any business accountant has quite a high pay rate. However, taking on these responsibilities yourself will take you many hours, which you would have rather spend on more productive things, such as improving sales strategies, expanding your business, and taking some rest, of course.
But don’t worry, we won’t leave you out there alone! We are here to show you all the product features of accounting softwares such as QuickBooks and Xero, which will help you keep track of your finances and become your financial solutions lifeline!
QuickBooks Online is accounting software that lets you track all the business transactions from all of your gateways, such as credit cards, Stripe, PayPal, IntegraPay and others. This software will enhance your business and optimize your time usage.
Xero is accounting software that works as your bookkeeper connected to your bank and other business apps. This software provides precise and safe reconciliation, and advanced automatic bookkeeping.
However, in order to optimize your accounting software and automate reconciliation, we are the solution for you! Synder is a reliable business tool, which will take care of all the important financial information for you. Your manual reporting may contain errors, whereas automatic account reconciliation is 100% accurate. If you’re still using an Excel spreadsheet or manual records in a notebook, it’s time to change your perspective on modern alternatives such as Synder.
This accounting software will help you:
- Connect your online store, such as eBay, Amazon, Shopify, etc., to business accounting services.
- Synchronize your transactions live.
- Record all your expenses automatically, so you can set up income categorization.
- Connect multiple payment methods to your online store and all the receipts will be kept in your books in the right order.
- Track your net and gross income in sales.
- Watch your financial performance to analyze your business progress.
- Get 24/7 customer support that will address any issues you might have using the software.
Synder is affordable and easy-to-use. It contains time-saving features, such as automated bank feeds, automatic payment reminders, and online invoicing and payment acceptance. The software has comprehensive, customizable, real-time financial reporting, because that is crucial for monitoring and understanding your business finances. Combining accounting software tools and invoicing tools is rare, but Synder is excellent at its job. Its different payment gateways open more opportunities for you to offer your customers not one, but many payment methods.
Automation progress frees up your time and lets you focus on more important aspects of your business. You will be able to control supplier invoices and anticipate future bills to pay.
Internal accounting is the key to successful and smooth business workflow. It may seem a little difficult, but understanding the basics of accounting, and it will help you. Investing in the right accounting software will get your finances in order and make it easier for your business to function. Such small business accounting software as Synder can help you avoid inevitable human errors made in small business bookkeeping, even by the most proficient accountants.
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