How to Deal with Simple Accounting and Save Assets

Dealing with accounting elements of business is usually an excruciating task for new business owners. More often than not, rules are complicated for a non-accountant and penalties are severe in case you miss any important details. As a result, business novices spend a lot of money on accountants, to have that part of work sorted out for them. Here’s how you can do it on your own and save some money along the way.

Tracking all expenses

You know how basketball experts often say that firm defense is the base of every attack? Well, the same logic can be applied to DIY-accounting tasks. Tracking expenses is one of the essential features that business owners need to deal with if they want to reach positive results.

Knowing what and when your business has to pay is important for many different reasons.

First and foremost, you need to cover all your accounts payable on time, so as to avoid any potential issues with different business partners.

Apart from that, tracking your expenses will help you monitor your business growth and make any necessary changes.

So, one of the things you can do to track your expenses on your own is connect your bank account with the online payment option you use, for instance, Stripe, PayPal or any other solution. That way, you’ll be able to transfer money between your accounts in accordance with your current needs and keep the record of all the expenses.

On the other hand, not connecting those accounts might result in overlooking some important expenses.

Moreover, you can add one of the expense-tracking apps to your software crew and improve your tracking habits.

Issuing user-friendly invoices

Modern entrepreneurs should include modern invoicing options to their business operations. While you can still use Excel or Word invoices, they don’t offer the versatility of custom-made invoice templates.

These special forms can help you organize your invoices and adapt them to your specific needs. For instance, you can always use the same invoice type for the same client or just within the same project. It will make it easier for you to group the invoices, set the invoice dates and arrange them in a more organized way.

Additionally, your invoices have to come with a special set of rules. What will happen if your client misses the payment deadline? How will you cope with repeat non-paying clients? Setting these little details in advance with clear invoice payment terms will help you perform the invoicing tasks without stress and, most importantly, on time.

Following your accounts receivable

Closely related to the matter of invoicing, following your accounts receivable is another feature that can contribute to your business growth. Whenever you provide a service for another business or sell them a product, you’re eligible to receive a payment for that purpose. These due payments are also known as accounts receivable.

When you’re trying to cover all the accounting bases on your own, it’s extremely important to know what your clients will pay you and when they’re going to do it.

While you can automate some of these payments, so as to save time, you should make notes on more substantial accounts receivable. For instance, if you’re just finished working on project worth a couple of thousand dollars, you should make a reminder pertaining to the agreed payment pace with that client.

As a result, you’ll know when to expect larger payments and, consequently, you’ll be able to make some more serious business plans.

Moreover, if your client fails to pay the agreed sum, you can react at once and contact them to see what went wrong.

On the other hand, not reacting to such a situation on the spot might lead to even more serious payment delays.

Collecting bills for tax deductions

No matter where you live and work, your national tax administration must offer some tax deductions for your business expenses. These benefits are given to entrepreneurs in order to help them finance their business.

Therefore, you should collect all the bills and receipts for the money spent on the items important to your business, so as to claim tax deductions for a number of services.

For instance, if you had a dinner with a business partner, the lunch you paid in the restaurant is tax

Moreover, if you used a car to get to that business meeting, the fuel consumed along the way is also deductible. However, using your car for family reasons can’t be accepted as a ground for tax deductions.

Similarly, if you need to travel to make some business appointments, these expenses can also be deducted from your tax report.

In a nutshell, it’s crucial that you keep all these receipts so that you can show them once your local tax officers knock on your door.

Conducting frequent checkups

When you’re trying to hold the reins of your accounting, you always need to be aware of the condition of your business. This means that you should conduct regular checkups regarding your budget, as well as your assets.

In line with that, make sure that you check your bank account at least once a week, especially when you’re waiting for a larger payment. Even though nowadays banks and payment services send regular reports, it’s different when you analyze your finances after a certain period of time.

Developing the habit of checking your business account will be beneficial in terms of planning.

Apart from that, you should also pay special attention to late payments. A growing small business mustn’t allow any larger postponements in this area of work. Your budget will be fragile and inconsistent during the initial stage of your work and every cent is important for your liquidity in this period of time.

For all these reasons, have a look at your balance sheet and your bank accounts frequently and revise your weekly and monthly business plans in accordance with the figures on these features.

Conclusion

Outsourcing accounting tasks can be too demanding for your budget when your business is still at the beginning. What you can do to save a fistful of dollars more in your pocket is cope with some simple accounting features on your own. Since we’ve also been there, this guide should help you deal with some accounting tasks on your own and improve the efficiency of your small business.

Mark Thomasson
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.
Mark Thomasson

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