As a business owner, accounting can be very stressful. It might be compared with going to the dentist or exam preparation. A little inconvenience today often saves a lot of pain tomorrow.
Does that sound a bit cliché? Maybe. But common phrases can offer a surprising amount of wisdom when they’re used the right way.
Once you have an effective bookkeeping and accounting system in place, you’ll have far better results on your company’s financial situation, and you’ll find fewer unpleasant surprises as a result.
Time is Money
Time is a valuable commodity, so we should be as quick or expeditious as possible. Implement a system to track your billing, then make sure there’s a process in place for following up on it at regular intervals. You should have a plan for systematically dealing with accounts that are 30, 60, and 90 days past due.
Day late and a dollar short
When tax day is coming, it shows up every year without fail. Put aside tax funds in advance each month, or every time your company makes a sale.
When you track taxes in a separate financial account, it means you won’t inadvertently spend money that isn’t yours, and you won’t get stuck with the penalties and interest that can incur as a result.
Save money for unexpected need
Planning ahead up to five years in advance is part of a sound business strategy.
Don’t let major expenses catch up with you when you least expect them.
By budgeting to use income from the profitable months to cover fixed expenses during the sluggish ones, is also a part of a good business strategy.
Whether you work in Excel or outsource your accountant, it’s important to track the details of exactly what’s going into your business account every time a deposit is made. Accounting can track all activities and thanks to that, you will be able to make future business decisions.