Keeping up to date financial records and accounts simply has to be done, unfortunately. Not only is it a regulatory requirement but it is also provides vital information into the performance and health of that business. That being said, the accounts can still be a bit of a pain to manage. Usually for a small business the burden falls on an in house bookkeeper or indeed the entrepreneur themselves. After that they are passed over to an external accountant but, more often than not they come back with queries and questions which means more time is needed to put them in proper order. Time is valuable in business, but perhaps even more so to small businesses. Here are some simple tips and insights into how to do accounting for small businesses that will hopefully save you time and of course, some money.
1. Get a system…and stick to it!
The trap that many of those that struggle with running small business accounts fall into is not having a system. Preparing financial records ad hoc is just going to lead down the road of trouble. Having a system means that you will always know what has been done and what needs to be done next. Your system can be as flexible or as rigid as you like. Most important is that your business has a routine for preparing your transactions. If you set aside time at the start or end of every month to update your accounts then you are likely to stick with it. This means less stress and more time on your hands the closer you get to your financial year end. Knowing exactly in what condition your accountant would like your books to be presented in should be part of your system too. Doing something extra which your accountant will undo later will cost them time which you will ultimately be billed for. It may also cost you or your staff time as they have to clarify certain entries with you or your bookkeeper. Come to an agreement as to at what point the books are to be passed over.
2. A sale isn’t always a sale
It’s well known that a sale is not a sale until it has been invoiced, particularly if you have a longer payment term. Processing invoices should be a priority. After a sale has been agreed, with goods or services provided an invoice should be sent to the client as soon as possible. If this becomes part of the sales process then it will reduce the workload of preparing the accounts, provided communication is good. The business’ cash flow will also be improved as there will be no lost time if invoices are completed promptly. Big Red Cloud’s accounting software package allows for the printing and/or emailing of invoices so that your business can process them simply and easily. We also allow you to customize your invoices so that your business is represented how you want it to be.
Perhaps the most important tip is to back up your records. If the worst happened and you lose your records the last thing you want to do is have to start from scratch and lose all the time that was already sunk into preparing your accounts. Making copies of your records doesn’t mean doing so just once or twice. In fact whenever transactions have been completed for a given month the records should definitely be backed up. Here at the cloud we would recommend doing so more often than that. Don’t fall into the thinking that it will never happen to me. You never know what could cause you to lose your data. A freak power outage can corrupt a file and leave you stranded.
Luckily with Big Red Cloud, back ups are taken automatically so that you never have to worry about backing up your data, or what would happen if you hadn’t. Indeed, more and more SMEs are realizing the benefits of cloud accounting solutions such as Big Red Cloud. With cloud technology you can access your accounts from anywhere at anytime so long as you have internet access. So even if you’re out on the road visiting a client you can invoice him there and then if you want, although he probably won’t thank you for it! You can also have access for every single person in your business that needs access, without any extra cost. Cloud technology is definitely the way forward for businesses so if you’re interested in seeing what it has to offer you, why not try our free trial?
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