Attention all small business owners! As an accountant who has seen a lot, I want to share with you the 5 essential things that every business owner should keep in mind. Prepare yourself, as these tips have the potential to significantly improve your business.
1. Be Involved in Day-to-Day Record Keeping
So, you've got your trusty accountant on board, but wait... don't think your job is done just yet! Believe it or not, we need more than bank statements to work our magic. It's all about those finer details that only you and your team possess. Without your input, we can't work wonders, so involvement is key!
2. Establish a Recordkeeping System
From QuickBooks online to any system that floats your boat, having some form of record keeping is non-negotiable. Consistency is key here – it doesn't matter how fancy your software is if it's collecting digital cobwebs. Find what works for you, stick to it, and watch the magic unfold!
3. Keep Business and Personal Funds Separate
Separate those cash flows, folks! Mixing business and personal funds might seem convenient, but trust me, it's a recipe for disaster. Take the plunge and set up a dedicated business account; you'll thank yourself when tax season comes around.
4. Learn to Read Financial Statements
Financial statements are essential for every business, serving as the foundation of its operations. It is vital to comprehend the significance of these figures and guarantee their precision. Connecting your bank reconciliation reports with your balance sheet and profit and loss statement is an important skill that all business owners should strive to understand. With practice, you will gain the ability to promptly assess the reliability of the data you are examining.
5. If It Sounds Too Good to Be True...
We've all fallen for the promise of a one-size-fits-all software that makes bookkeeping a breeze. Spoiler alert: it's usually too good to be true! Technology has surely paved the way for easier bookkeeping, but you must know what's going into your software. Remember, garbage in, garbage out!
So there you have it, my top 5 tips straight from the accounting trenches to help you navigate the world of business finance. Get hands-on with your records, set up a solid system, separate those funds, master financial statements, and never forget to approach tech solutions with a hint of skepticism. Your business will thank you!
I hope these insights will serve you well on your path to success in your business. Best of luck with your business ventures until we meet again!
Starting a Business | Bookkeeping | Accounting
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