Business accounting is one of the most important aspects of your company. If you don’t have the books properly balanced, you’ll wind up with solvency issues. This capital shortfall could cause you to fall behind on vendor payments, miss opportunities for business growth, and lay off staff. Balancing the books is the foundation of your business. Here are five things all companies should know about accounting hacks.
Watch the Bottom Line
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Running your company pulls you in different directions. It’s easy to lose sight of what’s important when you’re caught in the daily grind. That’s when you’re likely to make the biggest mistake of all, not knowing the current financials of your business.
You must train yourself to study the financial reports every time they’re updated. The monthly, quarterly, and annual reports identify which of your departments are meeting their goals and which ones are falling short of expectations. The parts of the company that continue to lose money are the ones that require the most nurturing from you. Also, you’re the one with the greatest knowledge of your business. You’ll be the first to notice any financial irregularities in the reports.
Since your cash flow is critical, it’s important that you get paid in a timely fashion for services rendered. Historically, you might have shown lenience to your customers since you also may owe a few vendors some money as well. Alas, this falls under the category of “Neither a borrower nor a lender be.”
You don’t want your customers to feel like they have zero percent loans from you. If you can get that treatment from your vendors, you should, since a dollar now is better than a dollar later. Now that you’re on the other side of the supply/demand equation, however, you understand why that’s problematic. Receiving timely payments for your products and services ensures that your accounting ledger is balanced and in good shape.
Trust Your Programming
No matter how reliable a human accountant is, they’ll never match a computer program with regards to accuracy. Human error causes 30 percent of all data loss, so you may wind up with unbalanced books through simple accounting mistakes by your staff.
A reliable software program will negate any such data loss concerns. Best of all, one of the industry leaders won’t charge you for this sort of desirable financial protection. Sage offers free accounting software to handle all your accounting needs. With this program, you’ll protect all your critical information while receiving reliable, accurate reports about your daily cash flow.
Hire a Pro
One of the easiest ways for a company to spend money needlessly is through government taxes. Your accounting staff may have experience with many facets of bookkeeping, but if they’re not income tax experts, you’re almost certain to overpay. Your local and national legislators want to aid small businesses by lessening their tax burdens. If you’re unfamiliar with these write-offs and incentives, however, they do you no good.
By hiring a trained tax expert, you guarantee that you’ll receive all the tax benefits your business deserves. Plus, you’ll protect yourself against issues with the Internal Revenue Service. If any problems occur, your tax preparers should have insurance that covers them and you in the unlikely event of an error. Before choosing a tax service, ask if they have coverage and, if so, exactly what it protects.
Learn Your Cash Cycle
Virtually every industry is susceptible to cash flow fluctuations. Many retailers perform better during the end-of-year holiday period, as an example. No matter your product or service, you’re going to have some months and quarters that are better than others. Learn from this behavior. By anticipating it, you can unearth ways to capitalize on strong financial periods while protecting your interests during standard downturns. You can also manage your vendor contracts to pinpoint the times when you’ll have the easiest and hardest times paying for services in a timely fashion.
Accounting represents the life blood of your company. Your cash flow defines your solvency. It’s critical to have the best bookkeeping processes in place. By employing these five accounting hacks, you’ll secure your company’s future.