Small Business Accounting

Best Accounting Practices for Small Business

There are many options for the small business person to establish a quality accounting system that also reduces the time spent on accounting task. Know that as a small business owner, keeping up with regulatory, economic, and reporting requirements can be an arduous task. In addition, keeping accurate financial records is an important piece in qualifying for a loan. Every lender is going to want to see at least five years of financial statements including your cash flow statements.

Business Loans

Apply for a small business loan with one simple application and get several offers. Lenders will make offers based on your business credit and income. It cost nothing to apply so it is worth a few minutes to see what kind of loan offer suits your needs.

Business Accounting

Business accounting involves several different aspects of transactions including accounts receivable, accounts payable, and payroll. Accounting functions may be performed in house, partially outsourced, or totally outsourced. Most businesses use a payroll service due to the complexity of record keeping, reporting, and paying collected payroll tax funds to the government on a quarterly basis.

A Guide to Small Business Accounting

- Consult a Professional: Seek advice from a bookkeeper, accountant, or CPA. They can help you set up your accounting system and provide personalized guidance.

-Choose a Business Structure: Decide on your business structure (e.g., sole proprietorship, LLC, corporation). This affects your tax obligations and accounting requirements.

-Open a Business Bank Account: Keep business finances separate from personal funds. A dedicated account simplifies tracking income and expenses.

-Select an Accounting Method: Choose between cash basis (records transactions when money changes hands) or accrual basis (records transactions when they occur) accounting.

-Set Up Your Books: Organize financial records, including income, expenses, and assets. Use accounting software or spreadsheets.

-Record Financial Transactions: Log all business-related transactions, such as sales, purchases, and expenses.

-Generate Financial Documents: Create essential documents like profit and loss statements, balance sheets, and cash flow statements.

Accounting Software

The best way to manage your accounting is using professional accounting software that can help assure accurate reporting and save a lot of your time.

There are several brands available, such as QuickBooks or Sage, so do your research to see which one is going to suit you best. This type of software can integrate with your bank, your tax preparation, and tax report filing. It will help you stay in compliance with IRS requirements and provide documentation in the event of a tax audit. Off course the software is only as good as the input, which should bear periodic scrutiny.