5 Tips to Ensure You’re Doing Accounting the Right Way
While many business owners understand the importance of accounting, a fair few don't realise its role in their company. Of course, one must understand that accounting can make or break a business venture—the former done by professionals and the latter done by inexperienced individuals. When running a small business (or any business for that matter), the former is what you'll want to experience. As such, you need to identify the right accounting strategies that exist to ensure your company does accounting the right way.
That said, if you are looking for tips on how you can adequately do accounting for your business, here are some that you should consider following:
1. Open a Business Account
First things first, right after you've registered your business, go ahead and open a business account. This is where you'll stash all your income, and having a separate account allows you to easily keep records of all your business-related transactions that don't get mixed up with your records. Keep in mind that if you are an LLC, a partnership, or a corporation, you need a separate bank account. As a sole proprietor, you don't need to get one, but we still recommend doing so.
2. Track All of Your Expenses
Whatever expenses you experience, track them all. This is the foundation of solid bookkeeping and accounting, as knowing your costs will allow you to understand your company's financial health. Now, to track your expenses, you need to set up a way to keep receipts and other records. From your home office receipts down to your business travel costs, all the receipts you collect must be stored and labelled correctly.
3. Research Import Taxes
If you are planning to buy or import goods from outside countries, you will need to know the taxes and duties you will be subject to. They will affect the costs you pay for the products, and having a duty calculator will help you estimate the fees quickly and effectively.
4. Know the Sales Taxes
Sales taxes come in various sizes and forms, and you need to be wary of the sales taxes that your customers are obligated to pay. This is especially true when dealing with e-commerce, where despite making it easier for you to sell items, there are sales tax regulations that can easily leave you confused. This gets a little more challenging knowing that customers can come from different states and even countries, so knowing where your customers are from and understanding the tax they're subject to will allow you to meet tax obligations.
5. Apply for a Business Loan
Sometimes, the money you have right now isn't enough to grow your business. You may need to apply for a business loan to fund your operations. Just be careful when getting loans, as you will eventually need to pay them off. However, some risk is vital to boost your company's growth, so with lots of research and advice from a professional accountant, you can consider applying for a loan.
By following the tips above, you can increase the likelihood of ensuring that your business is on the right path financially. Though you might be making much money or at all early on, we promise that if you keep up good habits and work with professional bookkeepers or accountants, your company will experience growth, leading to your first revenue and more! That being said, if you do find yourself overwhelmed with all these financial obligations and activities, we recommend reaching out to accounting firms to help you out. While it will cost you some money to hire their services, it is an investment we wholeheartedly believe is worth it. Having experts take care of your financial well-being helps keep your business steady, ensuring you make sound financial decisions to keep your business running!
New Wave Accounting are small business accountants on the Gold Coast, offering end-to-end accounting and bookkeeping services to help businesses scale and grow. Reach out to us today and let us help you stay on top of your finances!