If you are running a business, you know exactly how difficult it is to deal with business accounts and bookkeeping. Maintaining accurate and current books is not a walk in the park. As tedious as it may be, it is still of paramount importance for you to update your accounts frequently. Business accounts help you identify the financial position of your business, in turn, helping you make more informed decisions for your business. Business accounts also help you keep proper track of outstanding invoices. Without straying away from the topic any further, here are 4 ways to maintain your business accounts. The following tips will undoubtedly help you be on top of your business!
- Keep your business accounts separate
You must avoid mixing your personal and business accounts at all costs. Of course, it can be tempting and convenient to use your business credit card to pay for your personal expense. And, you can still pay back to your business for a personal expense, but if you keep doing it regularly, things can start to get complicated. However, if you can’t avoid mixing your expenses, you must record all the accounting transactions. What is the benefit of separating your business and personal accounts? By doing so, you will be able to keep track of deductible expenses easily.
- Hire the services of a professional accountant
If you find it difficult to get your accounts done, you can easily outsource your work to a professional accountant. Professional accountants have a wealth of knowledge of the profession and are well-aware of the tax laws in their jurisdiction. Of course, hiring an accountant can get expensive, but they can also prevent you from paying hefty, penalty fees. Professional accountants work quickly, efficiently, accurately and leave your business with a clear audit trail for the future, saving you time and preventing errors.
- Use accounting software
It would be foolish of you to not take advantage of the numerous benefits of using accounting software. There isn´t a dearth of accounting software solutions in the market and some of the popular ones include Xero, Freshbooks, and QuickBooks etc. Humans are prone to errors; it is an unavoidable fact of life. However, with accounting software solutions, the chances of miscalculating totals are reduced considerably. Accounting software records and processes accounting transactions within functional modules.
- Maintain several accounts for your business
Bookkeeping and maintaining your business accounts using just one account can be the stuff of nightmares. If you simply have one account for your business, it can get extremely troublesome when you do your taxes. Therefore, it is recommended for you to have different accounts for your earnings and expenses. In addition to that, you can also set up accounts for payroll and emergency funds. Doing so helps compartmentalize your money and helps you keep track of your money/ transactions easily.