Skip to content

5 Accounting Tips That Small Business Owners Should Know

text: 5 accounting tips that small business owners should know. Background graphic - accountants hands working on spreadsheet in front of a keyboard

For many small business owners, accounting is one of those tasks that gets filed under "I know I have to do it."  And, it makes sense, as you would rather be working on something passionate that lead you to starting the business.

Even if you work with a professional accountant, these are 5 tips you still need to know to keep your books in order and to keep your accountant happy as they work with you.

Keep Accurate Records in a Timely Manner

It may seem obvious about keeping accurate records, but you want to make sure that you keep and maintain accurate records of your financial records, including expenses, sales, and receipts.

Using financial software like Quickbooks will also make sure you are up to date on your numbers.

It's important to do all of this in a timely manner so that you have an accurate idea of your financial health in case you need to make a decision.  And, if you let that pile of receipts sit there longer and longer - you'll dread the moment you finally have to "get it done" and get your receipts entered.

Separate Business and Personal Finances

Have you ever spent hours trying to untangle two knotted up strings of Christmas lights?  Imagine that one string is your personal finances, one if your business finances, and tomorrow is Christmas Day.

This is what it can be like when a tax deadline is quickly approaching.  The best way to manage it is to keep business and personal separate.  This includes, separate accounts and separate debit/credit cards.  It will save you time (and time is money) when it comes to reconciling accounts, tracking expenses, and preparing tax returns.

Understanding Tax Obligations

When it comes to taxes, expenses, and anytime money needs to leave your bank account - you don't want any surprises.  If you need to save up to meet your taxes, know when those deadlines are and what your obligations are.

Work with a tax accountant to make sure you're complying with all tax laws, and not getting stuck with penalties and interest charges.

Keep a Budget

No matter how hard you try, you can't keep track of everything in your head.  Creating, then sticking, to a budget makes sure that you can balance your revenue and expenses.  And, accounting software can help show you the real-time status between your budget and your actual spending.

And, I can attest, sometimes you may not realize you are spending as much in a certain category as you thought.  This can help you identify areas where you need reduce your expenses.

Review Financial Reports Regularly

I alluded to this earlier in our "Keep Accurate Records" tip, but you need to understand the financial health of your business.  You can do this by reviewing reports like your profit & loss statement, balance sheet, and cash flow statements.  Accounting software can print these reports in the blink of an eye.  Some key decisions that you could make in your business can be effected mightily by where you stand financially.

In conclusion, these tips are meant to keep you on the track for success.  As the same time, even though you may dread pulling up Quickbooks or a similar program, you will save time in the long run.  You will be able to pull up accurate data to give to your accountant and avoid the panic of trying to reconcile your books at the last possible minute.  And, remember, time is money.

Scroll To Top