Top accounting practices for small businesses
Whether you own a Fortune 500 company or a startup, you need good accounting practices to keep track of your transactions. No matter your size, the future of your business and ability to achieve goals keeping good records of transactions is a crucial task. Adhering to basic accounting practices can help your startup succeed where others fail.Here are some insights into the accounting principles that growing are deploying :
Make accounting a priority
As a business owner of a startup you will be required to wear a number of hats in the beginning. This may compel you to put off certain tasks, accounting being the main one. However, that is the best way to lose more profits and cash than you gain.To give you the best chance of managing your cash your books need to be accurate from the get-go. Ignoring it too long can lead to bills going unpaid, unexpected tax debts, customers not paying you and cash running out. Not making accounting a priority can cost you more than time, it can cost you your business.Successful businesses understand that their business is a collection of processes that all need to work together well. Ignoring one can cause the rest to fail.
Use a cloud accounting system
Smart, well run small businesses rely on cloud accounting systems, like Xero, for all of their accounting needs from startup. These systems are make accounting accessible by using the latest technologies that remember transactions, process invoices, collect credit card payments, manage tax compliance and pay employees.Small business systems like Xero, have come a long way and are fast becoming a hub for your business. You can find plugins for just about any business processes (inventory management, customer relationship management, e-commerce shopping carts) that share the same data. These integrated systems then give you incredible insights into your whole business, helping you manage business performance in a low-cost way.
Track your money actively
All of your team has to track where the money is coming from and where it's going. Every day can feel like a cost review, but making sure every dollar is spent like it?s your last helps avoid unnecessary costs.Bootstrapping was once thought of as a startup thing. The truth is all businesses strive to do more with less. With the starting point being a budget. The budget is more than just a document that shows revenue and cost targets. It's a tool that translates strategy into operational objectives.A budget is not a document you should set at the beginning of the year and then forget. Just like an A/B test, your budget is a series of hypothesis about how events are likely to play out over the year. Actively testing your assumptions requires that you accurately capture and track all transactions - even the coffee meetings.
Running a business means splitting your time between finding customers, developing great products, building a great team and building the business' foundations. With so much to focus on you quickly find tasks to avoid. Like accounting.The art of business is all about knowing when to delegate. Delegating your bookkeeping and accounting tasks to a specialist gives you back time to focus on what?s important to you.It's like purchasing your servers from AWS. Outsourcing your accounting gets you all the infrastructure you need without the capital cost of hiring and training employees. Instead of spending 1,000's on one team member, you get a team who will build solid foundations and scale with your business.