Accounting Tips for Small to Medium-Sized Businesses

Posted by Doshi Accountants on February 13th, 2021

Whether you have us handle these tasks or just certain aspects of your accounting, we would like to share some accounting tips that can be useful for small to medium-sized businesses.

It is often observed that in the world of start-ups and small businesses, competent and proper accounting systems are often not seen as a must-have. While everyone knows that a perfect company infrastructure includes a robust back office function, resources are often focused on the areas that create good profit. There is one setback with this – often areas that may not seem to be direct revenue generators and can still impact on your company’s bottom line. A business that doesn’t use steadfast accounting services can experience some real problem, often in the form of missed income or losses that should have been accounted for. Here are some common accounting tips by us which will help you to grow more and grow better in your business.

Keep your Accounts Separate– It is not advisable to manage your personal and business expenses from the same account. In addition, you should not pay your personal bills from your business account or business expenses from your personal account. It is often very easy to miss out a deduction that way or make a potential audit a real nightmare.

Stay properly Organized– Being in order and organized is very significant in every aspect of your business for success, and that is very true when it comes to your accounting. It is really difficult to make sound business decisions when you don’t have a clear picture of the financial health of your company.It is very important to stay organized throughout the year, rather than scrambling at the end during tax season.Develop a method of managing your data, actively managing your cash flow and reviewing your monthly and bank statement on a regular basis. Organize your receipts (including receipts for charity) and accurately record deposits.Spare a weekly time to get your paperwork in order and avoid pile up.

Have a proper Budget– You should always have provision of a minimum profit amount in mind that you want to earn and have a budget set up to accomplish your goal. Not keeping a track of your accounting and budgeting can leave you wondering where all the money went. Be sure to track your expenses daily so you can be sure you are on track with your budget allocations while you can still make changes to reach your monthly projections.

Create Profit and Loss Statements-How do you know if your business is losing money or making huge profit? Profit and loss statements are like a recap of your business, costs, revenues and expenses date wise. This can be monthly, quarterly or annually. Keeping tracking and regularly reviewing your income and expenses can help you assess the health of your business and plan for future growth and expansion.

Take Advantage of Small Tax Deductions-According to the Small Business Taxation Survey, filing and completing their income tax returns is one of the top concerns for small business owners.

There are a number of small business tax deductions that you can take advantage of to minimize your tax bills. Some common tax deductions which include the cost of goods sold, employee payments and benefits in kind, travel expenses, marketing and advertising, auto maintenance etc.

Use of Compliant Software- If you don’t have the budget to outsource accounting services, hire a professional accountant, then you can consider opting for a cloud-based accounting software to send invoices, keeping track time, calculate the taxes, record all expenses and generate reports etc.

In the initial stage you can do your own accounting and easily get away with it, but at the time of submission of taxes we would advise getting professional accounting services like ours to help you save your business and unknown penalties you may incur.

For more details visit on :- https://doshiaccountants.co.uk/