A number crunching geek by day and a fun loving gamer the night is how he likes to explain himself. David Shaw is one of the best accountants in his area of expertise who has been working as an accountant for about a decade. He now shares his wisdom with the world.
Small Businesses often ignore the power of accounting but if you are reading this post you understand what an accounting management system can do for you. The very success of a business relies on the accountability, revenues earn and the credibility. What some business owners fail to understand is the fact that clearer the numbers easier it is to run smooth operations. For those just getting started on accounting front, we have 5 simple tips to help you create an effective accounting system.
Create Simple but Effective Books
You are just starting out and there is not much to manage but when as you’d continue you’d understand that you should have started on this front a long time ago. Start with a simple solution with incoming and outgoing finances to keep track of your debts and the revenue. You can use Google Sheets for this purpose or try one of the many free accounting software available on the Internet. This would keep your account organized.
The easier it is for you to understand your accounting at the end of the month the faster it would be to manage such accounts. Keeping a simple accounting system is not only time effective but also if you need a substitute to fill in on your accounting tasks owing to an emergency.
Separate accounts for business and personal Expenses
New business owners often make this mistake. Paying through your business card to avoid walking down the ATM machine is not at all a good idea. It may be convenient for the time being but in the longer run it would corrupt your system and can create small discrepancies that may arise in audit or create taxation issues for you. Always keep your business account separate from your personal account and don’t mix up the two when making payments.
Persistence and Clarity
Don’t wait for the month’s end to ink in your accounting details. The sooner the better is the rule but if you cannot take out time to work on them on a daily basis, a weekly routine would suffice in the start. In order to ensure an effective system, you need to be working diligently. Accounting error can sometimes collapse huge industries let alone a small business. Make sure you ink in your accounts in a proper routine and count them down to the last penny instead of rounding off amounts to keep your accounts crystal clear. You don’t your small errors causing you hours of work just because you decided to round off amounts.