One of the greatest destructive forces among small businesses is poor accounting skills. Losing track of your funds and realistic financial goals tend to cause the business to burst into flames.
It’s vital that you keep track of your funds and have a clear, efficient accounting plan. Read on to learn a few useful tips for efficient business accounting!
Use Separate Accounts for Loans and Capital
Most small businesses first start out with large loans to fund marketing campaigns and your initial capital investment. If this is the case, make sure to have two separate bank accounts.
Your first account will have the capital your business is using for the sake of daily funding needs. This account is primarily for the things like restocking product, paying bills, etc. Under no circumstances should you ever use what is in this account for personal reasons. The money in this account is for the business and the business only!
The second account will technically have your earnings in it. However, while you still have loans, you should consider this account off-limits for anything except paying those loans back.
The way this works is that you’ll have the daily costs you need in the first account which you will use for whatever you need in a day. At the end of the day, you take the earnings you made and refund a portion of it to the first account. That way you will have enough capital for the next day, and you can leave this account alone until then.
Any remaining earnings should be placed in the second account and considered savings or loan funds if you still have a loan to pay off. If you follow this simple dual-account system, you should always find yourself with enough money for capital, and your loan payment should be solved as well.
Be Firm with Your Clients
You need to keep track of where your money is and know that you will get a financial return on delivered products from your client before sending further products. If a client receives your product and requests an additional shipment when they have yet to pay you for the first, you must insist that they pay up before a second shipment can be sent.
The business world is not a place for soft people unless you’re in a business niche with no competition. (And even then, you still need to be quite strict)
So long as you stand firm and make sure that all your clients pay up on time and you’ve planned out your bank account schedule down to the day, you shouldn’t have any financial difficulties.
Hire an Accountant
If you feel like you’re incapable of sorting out your accounts alone, don’t be ashamed to hire a professional accountant. If you’re looking for a local winnipeg accountant or any accountant that lives near you, it shouldn’t be difficult to find a professional one. It’s better to pay someone to keep your business floating than watch your business collapse under your watch.