One of the most challenging aspects of running a business (especially a small one) is the litany of additional tasks you will have to complete. These are tasks that you may not feel like you are either qualified to complete, have no interest in, or find overwhelming alongside your existing workload. Small business accounting is one such job.
If you are running a small business, it is unlikely what drew you to the job in the first place, and business accounting can be a daunting task if you have never done it before. It may be a challenge, but business accounting doesn’t actually have to be that difficult, especially if your company is small and you keep up with it on a regular basis.
Easy ways to keep on top of small business accounting
Here is how to keep on top of your small business accounting processes and alleviate your stress levels about it.
Invoicing needs to be completed in an organized fashion
Drawing up invoices and sending them out to your clients is a dull but necessary part of a business – it’s what helps you get paid, after all. However, it is rarely as simple as submitting an invoice and getting paid immediately. It often takes a long time for clients to process the invoice and pay you. Sometimes it can take as long as a month to be paid, which is bad news if you are relying on that money to sustain your company.
One solution is invoice factoring. Essentially, it helps you receive the money immediately, rather than have to be at the whim of your client’s payment strategies. The bank that you set up the factoring deal with will take over the invoice from you, paying you the amount you are owed and then receiving subsequent payment from your original client.
Hire an accountant – or at least keep track of your revenue and overheads as you go
This might sound obvious, but hiring an accountant can actually save you money in the long run. While you may feel that you can’t justify the cost (especially if you are a startup), they will likely deliver more benefits than you first imagine.
Firstly – and most obviously – hiring an accountant will allow you to focus on running your company without being distracted by the stress of accounting. Secondly, they will likely find innovative ways to save the company money – or generate additional income in certain areas.
If you can’t afford a full-time accountant, then you will at least need to keep track of your finances on a regular basis. This will prevent you from having a mountain of finances to process, taxes to account for, or loans to pay off at unexpected intervals. Accounting isn’t rocket science as long as you keep on top of it, so don’t allow yourself to put it off. You will only give yourself more headaches further down the road.
Don’t overstretch yourself with too much debt
It is a lesson as old as business itself, but overstretching yourself with steep debt repayments can spell the end for even a healthy enterprise. While debt is sometimes inevitable in order to grow, you should treat it with the utmost respect. Getting yourself in debt can be dangerous, so keep on top of your repayments, only apply for a loan when you desperately need to, and don’t negotiate a deal you can’t pay your way out of.
