Monday, 6 November 2017
Keep your invoices and receipts in an unused file drawer or a shoe box sadly you may get this advice if you keep your accounts due for years and years and do not manage them. But keeping your receipts and bills in an unused file drawer or a shoe box is not a way to manage your accounts. Organizing and maintaining your financial accounts throughout the year will help you to be focused and also helps the accountant while taxing them. Just like people put a lot of planning and thought into your business, purchasing accounting software demands same attention. However before anything you have to first find out your needs.
Selecting accounting software for you accounting means performing need analysis, which includes understanding all the tasks you have to perform, who is going to use it, what are the necessary features you need? If it’s a new app you have to learn to make certain you know how it is used. For a solo operation you can even go with online accounting systems which keeps all the records in one remote location similarly like cloud server. Whatever system you select make certain you have all the features that you require. Having more whistles and bells than needed will make you distracted and waste your lot of time. Try some free demo. If the application does not have all that you need check for add on components which can provide you with proper functionality. But below given are 10 tips that will help you on how to do accounting and tips to do them properly.
Utilize technology: Cloud technology will give you excellent flexibility that you will need while accounting. Ability to perform the work on go access to information and reduces a huge amount on backups and servers. It helps you in automating a good amount of data entry time and reduces the chances for human errors. Many software help you with importing bank statements, managing recurring transactions and payments to save your energy and time.
Go paperless: If you still mail and print your invoices take a moment to think how much money you spend on envelopes, papers and postage. Then check how much you spend on sending payment reminder and late notice. You can perform all this by going paperless which is better for everyone.
Look for a good advisor: The very first thing you need to learn while accounting is that you should ask for help. Stop searching for an accountant, they are all outdated. Find a good advisor who will give you an overall solution. Check if he is experienced or not. His role should be like a facilitator and not just some bookkeeper.
Always check twice: If you are not using any accounting software application, then there are chances that your accounts will be unbalanced at the end. So always check the data twice. If you do not use any software and perform your accounts on Google Excel then use different control techniques. This will be as simple like checking sums vertically as well as horizontally to complex formulas. You don’t have to be an expert in using excel. Most of the features can be understood using help function.
Maintain impeccable records: Keeping records is not enough in long term. Your records should be impeccable. The best way to perform it is document imaging. This may sound expensive but it is not. There are a lot of free applications which can help in doing this. Basically all the accounting software offers this facility. You will save lot of cost and time with this. Also make sure you enter your bank statements in your excel file.
Accounting- a continuous process: Accounting is said to be a consistent process and does not end after some time. It should not be done one month and skipped for other month. Always remember that accounting should be done regularly. You should review all your financial statements each month so that you can make some important adjustments for yourself with regards to the savings and expenditures. If you ignore this you entire accounting can go wrong and will get too hard to handle them.
Keep it separated: If you have two different bank accounts one for your personal usage and other one for your business then make sure you keep all their records separated. If you mix both your account transactions and details it will not only create a problem in maintaining them but can also be harmful for your business. If you require some funds from your business account, you can make cash withdrawal or write yourself a self check in this way things will be a lot simpler.
Check your charges monthly and go for low rates: You have a freedom and choice to go elsewhere if the rates are not suitable for you. Some credit card companies try to take discounts when charges are submitted. Don’t feel pressurized to agree. Just see how customers bargain to get best rates. Feel the excitement of a customer and ask more. Seasonal time is best to call the providers and review the charges and get good rates. You yourself will be amazed to see the savings by only asking for it.
Purchase accounting software: Utilizing a spreadsheet or excel program to maintain your finances is a very good step. When your account increases it will become difficult to manage them. Starting off with the help of software will help you in maintain your accounts in a far better way. Most of the popular accounting software will not cost you more than 300 Euros each year.
Hire an expert if you require one: Yes this will cost you. But just give a thought how much a wrong accounting can cost you. Being compliant and dealing with the statutory requirements can be costly as well as time consuming. Hiring an expert will provide you the freedom to grow and also a peace of mind. Getting a business accountant will help you to consolidate this price with the accounting costs. Also they are very much experienced and have served as FD’s so they talk the same language.