No matter how small your business, it’s important to identify, record, measure and interpret financial information as this will help drive your business in a sensible direction. Keeping on top of financial records makes it easy to monitor profit or loss and can help you adapt your strategies accordingly. With this in mind, here’s how to keep SME accounting simple.
1. Open a Separate Business Account
Opening a separate business account is a legal requirement for limited companies and a good idea for sole traders as it separates business and personal finances nicely. Look for an account with low fees and exceptional customer support. It’s also a good idea to open a business account which allows you to enjoy multiple app services. For example, being able to create, send, track and pay invoices via an app is highly convenient.
2. Work with an Accountant
Running a business means you’ll always be busy. Accounts may end up being unmanaged or neglected for long periods of time which is why working with professionals such as Accountants in Brentwood is a convenient solution for many entrepreneurs.
Accountants will ensure all financial records are kept up-to-date, making cash flow tracking and forecasting a breeze. They’ll also take on bookkeeping which can make getting a loan a whole lot easier. Less time spent on the financial side of the business means you can focus on building and growing the business.
3. Track Your Expenses
Keeping track of all business expenses is an absolute must as this will ensure you don’t run into cashflow issues and will always know the financial status of your company. Costs range from business materials to marketing expenses. You must also take into account employee salaries which means payroll should be a top priority. Again, sorting the payroll and all that comes with it can be a tedious and long-winded process, especially if you have a big team. That’s why many companies choose to outsource repetitive tasks and look for payroll services in Brentwood who have the expertise to streamline the whole process.
4. Set Up an Invoicing System
A well-oiled invoicing system can result in quicker payments which in turn can improve the cashflow of your business. You don’t want to be entering the same information every time an invoice needs to be sent out, so make use of templates and create the correct branding. All invoices should be numbered and dated so you can keep track of them easily. If business-client communication is needed or you’re chasing a payment, it’s easier to refer to the invoice number. There should also be an accurate description of the work done.
Automating the invoicing process will save time, with online services allowing you to send an invoice without any postal costs. Just Know To Hows
5. Calculate Your Business Tax
Calculating business tax can be daunting and there may be different types of taxes you need to pay. So think about whether your income is taxable or not and if there are any allowances you can deduct from your taxable income or your final tax bill. You should also work out at what rate your income is taxed. If you’re a sole trader, you must pay income tax through HMRC’s Self-Assessment tax return. You can visit this site to know about Ask a question.
Small business accounting can seem complicated, but with the right processes in place it doesn’t have to be difficult.