Bookkeeping Tips for Small Business Owners

Financial advice for small business owners is everywhere – from seasoned financial experts to individuals who have been running their own companies for years. While there is a wealth of beneficial information to read up on regarding general accounting practice, cash vs. accrual basis, and all of the brass tacks that go into financially managing your business, we’ve compiled a few of the most common sense bookkeeping tips for small business owners below.

You don’t have to be a business or an accounting expert to understand the importance of:

Keeping an Eye on Equity – Don’t let loan debt outpace your assets or income. Your real financial value lies in the gap between these two numbers; it’s basic math that a business owner can neglect to consider: what you owe vs. what you own. If you are too concerned with growing your business at lightning speed and gathering all possible funding to do this, you might be getting ahead of your assets and creating dire financial straits.

Practicing Accounting for Both your Business and Investors – This is a basic principle of accounting but is an important practice to consider. While you make entries into your general ledger to ensure all of your accounts are accurate and up-to-date, you may also have to gather, summarize, and report on this financial information in a way that it can be presented to a third party for potential funding. This an important step to keep in mind when going about your daily accounting duties, as accurate accounting builds confidence in potential investors.

Not Getting Too Creative – Accounting is one particular area of running your business where creative license shouldn’t take precedence. While accounting does involve hard numbers and making sure your math checks out at every step, there is some educated guessing that can go into valuing assets and predicting future spending and income. Small business owners can quickly get themselves into trouble by purposefully, or even unintentionally, making big leaps in the valuation of equipment and future earnings, thereby painting an inaccurate picture of the business’ current standings and future potential. With trumped-up numbers, many small businesses find themselves trying to meet a promise to investors that it is not possible to fulfill.

Knowing When to Call in a Professional – Even someone with strong business knowledge who is capable in all other areas of running their company can find themselves struggling with important bookkeeping and accounting tasks – and this isn’t always made easier by the use of accounting software, especially if you don’t know how to work with the program’s features.  If you are spending valuable time in trying to figure out a bookkeeping process that a professional could do in half the time, seeking outsourced accounting help can be a serious relief. Weigh your options – how much do you pay yourself for the work you provide, on an hourly basis? If you are able to affordably hire a part-time small business accountant, bookkeeper, or QuickBooks consultant, for less than your own fees for your services, seeking outsourced help makes the most sense.

In all else, knowing when to look to an experienced financial professional can be the most important of all the tips and tools that small businesses should keep in mind. Not only can a business accountant take time-consuming tasks off of your to-do list, their advice can actually help you remain more profitable in the long-term. For more information about small business accounting in Mesa, AZ, contact the professionals at BASC today for your consultation.

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