If you’re a small business owner who recently opened up shop, managing the financials of your business will be critical to your success. Running a company is no joke, as it involves more than just the sales and marketing of products and services, growing your client base, and increasing your revenue.
Finding out what to sell and how to sell it is the easy part, but when you have to deal with the financing and other money-based aspects of the business, it becomes more difficult. Here are some financial bookkeeping tips you need to be aware of when doing accounting tasks that are integral to your business.
Keep Records Of Invoices, Payments, And Receipts
Be sure to always keep a good record of financial statements and records, such as bills, proofs of payment, and records of expenses. Remember that these are official documents, and will be required in any disputes you may have with people and the government. Documenting all customer payments and recording them properly when received is important, as this will help avoid conflict.
Always bear in mind that every single cent that comes in and out of the business is important to track, as money is the lifeblood that allows a business to continue to run. Not keeping a good record of every single purchase, expense by the company, or payroll transaction could lead to problems, especially when it comes to year-end finance reports.
File Sales Tax Properly
Each month, if your business is generating sales, you should also be accumulating sales tax as well. This is the responsibility of the company to do so, and missing tax obligations is something that could get you in trouble with the government. We don’t want that! Make sure you understand the sales tax requirements so that you know when and if you need to charge and remit sales tax.
Owing a large amount of tax can also ruin your credit when the CRA takes you to court and your tax debt is made a matter of public record. In fact, if your debt is too large, you might even end up having to file for a consumer proposal or bankruptcy, which will, in turn, damage your credit score significantly for up to 7 years.
That is why at Kinden Accounting & Advisory Services, we help with small business taxation and planning. This takes a huge weight off the shoulders of our clients!
Review Your Financial Reports
By comparing monthly income statements each month you will be able to determine how much your business earned and spent. Having a budget set each year will make it easier to track the growth of your company, which is what you will want to be able to manage growth or reduce risks.
Additionally, review your company’s balance sheet at the closing of the month and compare it to previous months to offer insight on how you can manage your assets and liabilities more efficiently. Track any notable increases and decreases in your company’s finances, as well as abnormal changes and trends. An example would be if your accounts receivable appears higher than normal, you may want to assess why this is so. Could it be a result of increased sales for the month, or have clients been significantly slower in remitting payments?
Financial management is often the most difficult part of any business, especially for smaller businesses without a steady accountant to deal with these issues. Bigger companies have their own accountants to handle statements and record-keeping, but if you are a new company starting out, you may have to take matters into your own hands. Finances are integral in running a business, and must always be accurate to the dot. Don’t let this get out of hand by hiring an online accounting firm to handle your bookkeeping services.
Kinden CPA offers the best bookkeeping services in Halifax for small and medium enterprises that choose to outsource their accounting needs. Our services are structured to make this process as simple as possible for you, while also not charging you outrageous fees each month. That means you can spend more time doing the things you love in your business! Leave the accounting to us so you have less on your plate!