When people hear the term “small business,” they usually think the number of responsibilities is lesser than big businesses. While the volume of financial transactions may be low, there is no shortage of details to consider. Tracking revenues, profits, and expenses can take a lot of your time and energy.
Bookkeeping is a necessary chore for every type of business, whether small or enormous. If handling the finances is getting too overwhelming and time-consuming, you may consider hiring an accountant in Lake Mary, FL. However, if you want to do this yourself, a few tips might help.
Accounting tips for small business owners
Separate business and personal expenses.
The first rule of having a business is keeping your personal and business bank accounts separate. If you use your personal assets to invest in the business, make sure you document that contribution. Maintaining a different bank account for your business allows you to limit legal exposure to business debts.
Track your expenses.
Tracking your business expenses helps you increase your profit margins. Many people calculate their expenses weekly or every two weeks, and some do monthly. However, tracking your business expenses on a daily basis allows you to see how much money is going and coming, which is an important money management strategy.
Remember and stick to tax deadlines.
One crucial part of having a business in Lake Mary, FL, is remembering the tax deadlines and knowing when they are approaching you. Setting reminders on your phone can help significantly. Remembering tax deadlines at the very last moment can be stressful because rushing can cause a lot of mistakes during the process.
It is quite simple when you think about it. Simply jot down the tax deadlines at the start of the year and set several reminders. This way, you will have enough time to file your taxes and won’t have to work in a hurry.
Accurately record income.
It is vital to keep tabs on all your incoming cash flow. Loans, revenues, and other cash infusions can be easy to lose track of. If you forget to record some of your income, you may unintentionally underpay your taxes, which leads to avoidable IRS penalties.
Create profit and loss statements.
Tracking how much money you are losing or gaining is a basic of owning a business. Profit and loss statements specify if you are gaining or losing money and on which specific dates. This can also help you assess the health of your business and plan for the future.