5 Basic Accounting Tips for Small Business Owners

How to do Accounting for Small Business

As a Business Owner you need to don lot of roles. That too, if you are a small business owner the entire business responsibility will be on you. One of the key things which you need to handle is the business accounting. If you have to scale up in your business you will have to know how to handle accounts effectively. Here we are going to take you through the 5 basic tips on how to do accounting for  small business

1. Plan your Budget: Spending is part of Business. If you can plan your spend properly and spend as per the plan then half your work is done. In a business spending can be in many forms like rentals, salary, marketing, electricity, purchases, communication expenses and so on. If you can anticipate known expenses and arrange funds then your task of managing funds will be much easier. Of course there will be other unexpected expenses also coming. So it”™s important that you need to budget some portion of your funds for unexpected expenses. This way you can manage your budget efficiently.

2. Get your payments on time: Getting new clients is one part of the story. But the most important part is collecting the payment from clients. You should adopt an easy payment policy through which your client should be aware when the payment has to be made. Similarly you should also provide the client a much easier way to pay you.

 

3. Record Maintenance: It is always important to maintain book of accounts. Be it journal entries, ledger, trial balance, profit and loss account or anything you should have all the records with the corresponding proof of documents intact. This will help you to avoid confusion during audit.

4. Maintain Separate Accounts: Small business owners have the tendency to mix their personal and business accounts together. This will actually create more confusion to you. It is always advisable for you to maintain separate accounts for personal and business transactions.

5. Use Accounting software: Business Owner need not be good in accounts. If you are one in that category then you should take the help of accounting software to do the accounts. By using accounting software you can save lot of time. You need to choose the right kind of software which should take only less time for accounting, less in price and at the same time integrated with your business. Check out the accounting software available in the market which will fulfill all the above mentioned things. Some of them are here.

I am a Chartered Accountant with 5 years of experience in both Consulting (KPMG) and Industry (Tapzo).

I am currently assisting various Organizations in understanding the impact of GST on their businesses to help them with a smooth transition.

Key areas of experience include:
– GST
– Developing SOPs and Process Implementation
– Identifying and Implementing Internal Controls as required by the ICFR Framework
– Training and Development of staff in various Finance/ Audit functions
– Statutory Audits

21 Comments
  1. Frozenlake Accounting 3 years ago

    I think these are not helpful only for small business owners, but other businesses can also try it. Budget planning and Record Maintenance is important in any business holders.

  2. Steve smith 2 years ago

    Sounds good! Here I have a few suggestions

    1. I always keep an eye on my bills because unpaid bills affect business credit.
    2. I suggest to get an expert advice regarding your payroll

    Thanks

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  21. Morris Edwards 6 months ago

    Informative tips for small business owners. It is also very important aspect of accounting that financial reports of business activities should be up to date in proper way.

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