As a business owner, you know that proper financial management is the key to your business’ success.
But you’re busy managing your business. And without the time to actually take care of the numbers, and the right financial knowledge, accounting mistakes do happen.
Here are five things you can do to help you avoid these costly accounting errors, and keep your business on track for success.
Separate your business and personal bank accounts
Creating a separate bank account for your business finances makes things much easier further down the track. You’ll know that all the money that goes into or out of your account is all business-related—every payment, every expense.
It’s much easier to consolidate your information when tax time rolls around, as everything is recorded in one central location. You don’t have to sift through bank statements to weed out the groceries from your operating expenses. You could also consider a separate business credit card too, to streamline your payments.
Use technology to track your business expenses
The ATO now allows you to keep a clear, accurate digital photo of receipts in place of a physical copy—so why wouldn’t you? Apps like Expensify, Receipt Bank, or the Xero add-on Xero Expenses enable you to take a photo of the receipt on your smartphone. This then gets scanned and logged to your accounting software, capturing the expense as it happens. No double-handling, no extra data entry.
Keep track of your accounts receivable
Keeping track of all your invoices and due payments will help you stay on top of your business’ cashflow. You’ll always know where your money should be, and never have confusing gaps in your account.
So chase up with your customers. Make it policy to either ask for payment at the point of service, or no more than 30 days later. And when you send invoices, follow up to confirm they were received, and chase them up promptly when they become overdue.
Cloud-based accounting platforms are fantastic at helping you do this. Xero, for example, can automate your invoicing, so your customers receive reminders when they have a payment due. It even offers a Pay Now option, so they can click a button and pay then and there.
Keep an eye on the future
When you’re busy running your business, you can sometimes get so busy with the immediate finances that you don’t stop to think about the next financial year, let alone 5, 10 years down the track. But effective business accounting means balancing your day-to-day finances with your future needs.
Luckily, your accounting software can help you with this. Many offer reporting features that allow you to analyse, plot, and plan your financials. You can use this information to perform future forecasting, track long-term trends, and to identify and put plans in place for future risk.
You don’t need to go it alone
While you might be able to manage some of your business’ financials yourself, a professional, trained accountant can take this weight off your shoulders.
Armed with the necessary training, tools, and knowledge to keep you on top of your financials, a small business accountant is invaluable in helping you achieve your financial goals.
At Accura, our small business accountants make it easy for you. We work with you at every stage of your businesses, to provide you with the right level of support, when you need it. Get in touch here to find out how we can help you improve your financial management.