Small Businesses Face Unique Accounting Challenges
You know the drill, you are a small business owner or C Level exec. As such you wear many, many hats and in any given day you can be the go to for operational issues, staffing and recruiting, team building, account management, business development and yes the often dreaded accounting function! It’s super important to stay on top of your books so that mole hills don’t become mountains. Here are some tips to help you maintain timely and correct financial statements and stay ahead of any issues.
- Manage Cash Flow – Many SMBs fail not because of their bottom line but because of the inability to manage cash flow and find funds to keep the business running during lean times. Analyze your bills carefully and make sure to collect on your invoices as quickly as possible.
- Unforeseen Expenses – It’s important to plan for a rainy day and have money set aside or access to credit for periods where your revenue is low. Also plan for any potential liabilities and have insurance in place to cover accidents.
- Disaster Preparedness – Natural disasters hit small companies the hardest so be sure to plan for any natural disaster that may come your way. Know your region and the type of issues you could face.
- Taxes – Preparing for and paying your taxes is essential. Know your business and what you can deduct to lower your tax burden.
- Payroll – Managing payroll including your payroll tax is essential. If possible, use a 3rd party that is an expert in the area to save yourself time and headaches.
- Pay your bills – Staying on top of your expenses and making sure your vendors are taken care of is a key indicator of long-term health.
- Reconcile your books – This should be a monthly or even weekly project for you so that you can stay ahead of and fix any issues that have popped up. It is imperative to have your numbers correct so you can analyze your business and how you are doing.
- Analyze your finances – Piggybacking #7, keep the books up to date and keep your understanding of how your business is doing up to date by constantly looking at and working through the numbers. This will help you understand what is working and what needs improvement.
These are just some of the tips that can help your business be successful and allow you to grow your company by keeping tabs on how you are doing now.
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