A business owner in the modern era has to adopt a financial mindset that’s a little different than in years gone by. Small businesses are sprouting up all over the place, meaning that virtually every industry has become a lot more competitive. The increase in competition has made it all the more important to refine your business model for a prosperous future. Having some basic financial knowledge, therefore, is essential.
Here at Aston Black, we offer bookkeeping services for small businesses, so we’re used to dealing with clients that require our skills and knowledge to organise their finances. There are always certain rules we tell every business to follow, so here are three key tricks that your small business cal ill afford to ignore in 2017.
By now, you should have set up a separate bank account for business purposes — and if you haven’t, there’s no time like the present. It may sound like a bit of a no-brainer, but as a lot of businesses start at home using personal funds, they just continue to use the same personal bank account.
You’ll want to set up a business bank account in the early stages of establishing your company and separate your business and personal funds from then onwards. Not only does this make it easier to track your finances for bookkeeping purposes, but you also prevent yourself or a tax accountant having a headache when it comes to organising your accounts for deadline day.
Another vital benefit of separating your accounts is being able to keep track of business expenses that you intend to claim against your business for tax purposes. If you use one account for personal and business, you’ll have a difficult job keeping track of what you can claim as a business expense.
A top priority for any business owner is to save money wherever possible, especially if it’s an unnecessary expense. This is why many people are reluctant to seek the services of an accountant; they feel it would be wasting money to pay for a service they could do themselves.
You may well be able to keep your accounts in order, but hiring an accountant provides you with so much more than bookkeeping services for a small business. With their help, the time you would have spent organising your finances is available for using on other key aspects of running a business.
Not only is it reassuring to know that you have an expert keeping your finances in check, but having a tax accountant for small businesses at hand when it’s time to file a tax return will definitely ease the pressure.
As your business continues to grow, you’ll have to invest more money if you want to rival your competitors; from increasing your ability to offer new services or products, or spending money on equipment, or business premises to expand your company. As the saying goes, “you have to spend money to make money”.
Paying bills and honouring debts is, unfortunately, part of being a professional. As a business owner, it’s vital to make sure you stay on top of both. Knowing exactly when bills will be coming out of your account, as well as making sure to pay all debts promptly, is crucial. This will prevent you from having a nasty surprise in an emergency, as late fees have dissipated your funds.
Being in charge of any kind of business means you’ll have a lot on your plate, which can make it difficult to stay on top of all that’s going on. This is exactly why bookkeeping for small businesses can prove to be a vital asset, preventing you from having any financial mishaps due to unpaid bills or outstanding debts.
One of the best things you can do for your business this year is getting your finances in order. Of course, doing so will help you to stay on top of any important financial dates or deadlines, but it will also save a lot of time spent trying to make sense of your disorganised accounts. Outsourcing your bookkeeping duties to an experienced accountant will do your business a world of good, ensuring organisation and expert knowledge for any future issues.