7 Accounting Basics for the Modern Entrepreneur
In this day and age, business owners who are quite hands-on with their business operations have a tendency to overlook certain aspects of their accounting process. Quite often, this is the reason why their critical business numbers deteriorate in such a short span of time.
Fortunately, you can avoid this situation altogether - you just need to focus more on improving your startup accounting processes. You can refer to these accounting must-do’s to keep your business finances on solid ground.
Learn more about accounting.
Working towards the improvement of your critical business numbers means keeping a close eye on your annual profits, your business budget and your working capital. You can work around these better if you understand the mechanics of financial statements, which is a permanent fixture across all accounting requirements.
Find an accountant.
Your business needs an accountant— that is a given. You need an accountant to provide you with advice about drafting your business plans, finalising the legal structure of your business and growing your working capital, among many others. Keep in mind that you will also need the professional counsel of an accountant in case your business gets audited by the Australian Tax Office (ATO).
Explore suitable accounting software.
Modern technology plays a significant role in speeding up the process of your accounting tasks. It also offers a wide array of features to assist you with those accounting requirements. This is why it’s twice as important to pick a reliable accounting software program. You can choose wisely by considering the software’s features, specs, prices and add-ons before giving it a final go.
Separate your business records from your personal records.
Certain aspects of accounting (such as planning your budget!) are easier if you keep your personal accounts separate from your business records. Moreover, complying with your tax liabilities as imposed by the Australian |Taxation Office (ATO) is also more convenient if you keep these two distinct.
Review your financial statements.
Financial statements are the pillars of your business accounting functions. To keep your business up-to-date with your critical business numbers, preparing financial statements is a necessity. Regularly updating these financial statements is your best defense against an unstable business financial status.
Approve budget plans for operations.
Your budget plan reflects the actual representation of how your business intends to spend its financial resources for a particular period. Determining the approved budget plan for operations allows you to map out the best use of your current business capital without missing out on priority expenses and the chance to grow your profits more.
Pay your taxes.
Conforming to your tax liabilities is a civil obligation that cuts across the size of your business and the number of employees under your wing. Failing to settle your taxes with the ATO will not just send out a red flag to the tax office, it will also lead to more complex problems such as tax debt and penalties.
As a business owner, you will always want what is best for your business. The good news is, you can get one step ahead in this endeavour by following these best practices in business accounting. These practical tips will help you keep tabs on your business performance and assert the economic viability of your business.
To help you get the most of improving your accounting processes, you can get in touch with our financial advisers at D&V. Click here to check out the D&V website.