Running a successful small business requires a significant amount of time, energy, and organization. There are various aspects of your business that demand your utmost attention to detail, one of which is your financials.
Keeping track of your business expenses, payroll, profit and losses is essential to the success of your business. While large businesses may have numerous resources for bookkeeping and accounting matters, small businesses often lack the means to dedicate a specific person or department to financials.
Now that our lives have transitioned largely to online, there are more tools and guidance available on the internet than ever before. This wide network of information makes learning the ropes of accounting for your small business quick, easy, and manageable.
Whether you’re a small business owner or staff member, getting your accounting and bookkeeping in order is possible. Here are four of our top small business accounting tips from the team at Compass Accounting:
Separate Business and Personal Bank Account and Expenses: It’s best to keep your finances as organized as possible, which is why we recommend separating business and personal bank accounts. Instead of sorting through expenses after the fact, be sure to diligently adhere to using your specified bank accounts for their intended purposes. Keeping your records separate will save you both time and money in the long run.
Use an Accounting Software: Digital bookkeeping and accounting make it easy to keep track of your important documents, employee information, payroll, and more. There are numerous accounting software options available online with different perks and benefits depending on your accounting needs. Small business owners can easily shop around for the best accounting software to meet their needs and help them feel confident in accounting.
Create a Profit & Loss Statement: To get a good idea of the whole picture, we suggest creating regular profit and loss statements. These financial records give small business owners a solid look at the revenue and expenses over a specific period, which can help formulate budgets and plan for future growth.
Update Your Financial Records Monthly: Financial information within your small business is always changing. Unforeseen circumstances such as COVID-19 can have a huge impact on your small business, and it is best to take a look at your statements each month to stay on top of your finances. Over time, monthly records can be an excellent way to accurately analyze how well your business is doing.
Compass Accounting works with small businesses in Mukilteo, Edmonds, Seattle, and the surrounding areas. We can help support and streamline your accounting process. Schedule a consultation with one of our team members today!