Being on top of your accounting is extremely important, especially if you want your business to succeed. Let’s be honest, that’s the point, right?
So to help you stay on top of your business finances, Bell Solutions LLC has put together 5 accounting practices that you need to live by in order to be successful.
5 Accounting Habits that Lead to Success
- Managing Your Account
Your bank account is the key to… everything. Not having money in your account means you can’t invest in anything. Understanding where your account sits in terms of what it takes to keep you up and running will help you make informed business decisions.
If you can only survive for one more month on your current funds, it’s probably not the best time to invest. If you do, your doors could be closing come the beginning of the month.
Make sure you keep detailed records of your account, it’s the driving force behind your business after all.
- Invoicing
Understanding what money is coming into your business is just as important as what is leaving. This means everything you buy or sell should have an invoice with it.
If you purchase something for your business, keep the receipt. Having all of these invoices in one spot will help you come tax time.
The same goes for what you sell. Keep all of your sales invoices together. Once again, come tax time, you’ll be happy you did.
If you sell to a lot of people, you might want to keep those invoices in and out for each individual customer. It might seem like a ton of work now, but the organization you will receive from such practices is priceless.
- Payroll
Ok, so this point goes back to number one, but it’s important to differentiate them. Make sure you can afford to have your staff. If you are making less money than you are paying out, that’s a problem. You also need to make sure you have the money to pay your employees (past and present) for the work they have done. That means taking into account start dates and pension commitments when factoring in who needs to be paid.
- Account for Miles Traveled
Mileage happens, but you should keep track of it! When you drive to a client, an employee goes on a business trip, and the like should be tracked.
A simple excel sheet can help you keep easy to read and detailed information. Employee Name, Location, Miles. That’s really all you need to keep solid track of your people. You can even use tracking applications on your phone to double check the distances travel.
- Fixed assets & Depreciation
You should keep a list of your fixed assets. As time goes by, those depreciate, and you can write that off come tax time. It can be as simple as a spreadsheet that details where the value of your fixed assets stand from year to year. This means the building, the vehicles your employees use, the heavy machines in the shop, and so much more. Fixed assets and depreciation can really come in handy during the tax season.
Conclusion
Accounting is important. It’s a great way for your business to ensure that its profits are staying where they belong, but that only happens if you keep quality track of your business. Quality files lead to quality tax filings… and they can keep you away from audits. Isn’t that nice?
Looking for some help getting your business’ internal structure set up and organized? Feel free to contact Bell Solutions LLC here.