Is accounting your favourite task as a business owner? Probably not, but building a strong financial foundation for your business could save you time, money and frustration. Accounting and finance are the languages of business, and numbers speak volumes about how your operation is performing. Read on for some tips on how to properly manage your finances and stay in business. Nowadays, computers and accounting software are more powerful than ever. You can get more done with less time and knowledge, and applying a few best practices lets you see at a glance how you're doing, how profitable your business is and where your money is being spent.
Here are the best small business accounting tips and tricks to consider:
For more info about accounting and best practices, visit the Federal Government's accounting resource pages and FoundersGrid's accounting best practices for small businesses and startups. Also, check out this Globe and Mail article that illustrates the link between strong accounting practices, bookkeeping and tax preparation.
Your bookkeeping could be simple or complex depending on the type of small business you run. But whether you choose to hire someone or DIY, you still need to be well organized to simplify your accounting and taxes. Basic needs: you could do it yourself if you work from home, expect to have less than $30K/year in sales and don't have to collect and remit sales taxes to the government. Average needs: whether you and your partner are interior designers and your business generates $180K in sales, or you operate a hair salon with walk-in customers and employees, you will likely need the help of an accountant and a bookkeeper at certain times. Advanced needs: you distribute truck components in Canada and the US. You have six people working for you, and the company is incorporated in both countries. You may need a full-time bookkeeper and an accountant with US corporate and tax experience.
Most accounting software is available as a monthly online subscription service. There are plenty of options, such as QuickBooks and Zoho, and PC Magazine publishes their top choices for businesses and more affordable options for freelancers. The Business Development Bank of Canada (BDC) also offers a comprehensive list, including some free alternatives.
When you own desktop software, you can access it from your computer at any time without a network and you also get more advanced features (if you need them). QuickBooks is a household name in business accounting software that can be purchased as a desktop or online product. The advantages of a subscription service are that it automatically backs up your data online and is available on any device, including your phone. It makes expense tracking and data input on the road a breeze.
Small business owners who want to improve their accounting knowledge and more effectively manage their operations have several options: governments and local business organizations provide free workshops and seminars in person or online. Community colleges also offer courses and continuing education.