Accounting Tips for Small Businesses

Jul 7, 2021 | Accounting

Typing on a small calculator

As a small business owner, managing your own finances can be overwhelming. The good news is that you don’t need to be a math wizard in order to manage the accounting needs of your small business.

4Corner Business Services has put together a few of our top accounting tips to make managing your small business easier than ever.

Open a Small Business Account

Where should your small business start? Mixing your personal finances with your business finances can lead to disaster. That being said, one of the first things you should do as a small business owner is open a new bank account under the name of your business. Having a separate business account helps small business owners keep their personal and professional finances completely separate, making it easier to track the money coming in and out of their business.

Having a business account will also help to keep life a lot easier when tax season rolls around.

Keep Those Receipts

Let’s talk “tax deductions” for a moment. A tax deduction is a deduction that lowers a person’s or business’s tax liability by lowering their taxable income. Did you know that a big part of your business expenses can be listed as tax deductions? These deductions include, client meals, office/store rent, business travel and more. However, in order to “claim” them, you must keep the receipts for verification and tracking reasons.

Accounting Tip for Small Businesses: Make and organize folders based on category for those receipts. Having your business receipts organized will make things much easier when the time comes to file taxes.

Create Profit and Loss Statements

A profit and loss (also known as “P&L) statement gives business owners a glimpse of the financial health of their business. What information does a profit and loss statement include? Gross profit, net profit, operating profit and pre-tax profit details.

Profit and loss statements also summarize your small business expenses within a specific period of time. 4Corner Business Service experts recommend having the following information saved somewhere before you start preparing this statement:

  • Any petty cash transactions
  • Records for every purchase you have made with your business credit cards and business checking accounts
  • Information for returns, discounts or price reductions you have offered
  • All sources of income paid to your business. This includes credit card payments, cash and checks

Implement Accounting Software

Small businesses can streamline their financial operations with help from accounting software. Another tip for small business accounting is to implement accounting software. Find software which can provide you with much-needed support in your financial planning, financial analysis and day-to-day business operations, including payroll and time tracking.

The 4Corner team has experience working closely with our client’s current software. We can also help businesses select a platform that is right for their business needs.

For more information on how 4Corner Business Service can help your small business, contact us today.

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