20 best accounting practices for small businesses

Darryl Bachmeier
Mar 31, 2019

The management of a company is not easy to do. It is necessary to pay attention to many details to ensure that it is properly developed to achieve the proposed objectives from the preparation of products and sales to the recruitment of personnel. There are many tasks that will keep you busy and you should not lose sight of them.

Even for the best accountant, keeping sales books up to date can become a headache. However, doing it correctly is of the utmost importance. If the accounting aspects are not well controlled, your SME will have less possibilities of growth. Therefore, keep in mind these tips to improve accounting for small businesses:

  1. Finances, a priority from the beginning

Usually, SME accounting is not one of the most exciting activities, but it is essential that it be a priority from the start.

  1. Keep updated accounting books

It is a really necessary point to achieve success and keep balancing the finances of an SME. It should be borne in mind that, if they are left unchecked, then it will only be more difficult to control the accounting order as time passes.

  1. Set priorities

In small and medium companies, a wide range of activities must be carried out, and it is important to detect which are the most important tasks for a business and those that could be postponed.

  1. Be efficient

Evaluate where the skills of the work team will be better utilized. It is important to use time efficiently and effectively. The more organized and focused you can be, the better the results of business will be.

  1. Invest in software

There is a wide variety of accounting software that allows you to keep an SME’s finances healthy. Identify which tools you need depending on the business line, and compare the different options, taking into account the size of a company, location and growth expectations.

  1. Select the appropriate software

The great variety of accounting software existing in the market makes it necessary to find out the functionalities of each and analyze which will be the most suitable for a certain company. As an example, too complicated software will not be useful at all if you do not know how to take advantage of all its functions for a Pymes accounting.

  1. Accountants, necessary specialists

If you are not really internalized in the accounting aspects, it is best to have the help of professionals in the field. As soon as your business needs it, it will be good to have a company focused on finances that can take charge of all aspects to manage. Although many tools are created for intuitive use, it is ideal that you know the terminology to understand everything related to accounting issues fully. After all, accounting software for small businesses is oriented to facilitate tasks, not to replace the accountant, so the management of these should be in charge of a person trained in the field.

  1. Keep things separate

A scenario to avoid - more common than you think - is that the company’s finances are mixed with personal finances. Avoid entering this circuit. The budgets of an SME must be well specified and ordered. 9. Cost control You must know all the money that comes and leaves your company. To do so, you will need an account in the bank that you use only for the business. This will help to know the profits and facilitate the time to pay taxes for the activity that is being developed. A little daily time can be enough to review the finances. This will allow fewer errors to occur and it will be easier to take timely measures if necessary.

  1. Project investments

It is important that you plan future investments, such as incorporating new machines or software. That way you can better organize your budget . ## 12. Updated balances To achieve an appropriate SME accounting, it is advisable to have updated balance sheets that allow the evaluation of the business status.

  1. Cash flows

It is important to evaluate the current and future cash flows in a company, the above is essential for the control of expenses, and maintain the functioning of an SME.

  1. Payment mechanisms

For some items, and particularly for SMEs that offer monthly services, it will be necessary to regularly check that customers make their payments in a timely manner, and for that, they must have the appropriate tools.

  1. Prepare for taxes

Do not wait until the last minute to put your taxes in order. If you keep the accounts of your company organized during the year, it will be easy to know what taxes you need to pay and have prepared the documents that may be requested.

  1. Plan at scale

Having an idea of where the business will be in the coming years can be key to developing your accounting strategy.

  1. Calculate the times of each process

In this way, it will be possible to plan more accurately the time taken by each accounting task.

  1. Automate tickets and invoices

A process that was previously complex and long can now be solved very easily with platforms that optimize tasks such as sending bills and/or invoices.

  1. Order of documentation

Although digital accounting processes are becoming more common, there is also paper documentation that must be kept in order and organized before any inspection that can be carried out by the relevant authority.

  1. When in doubt, outsource

Not everyone can be an expert in all areas. Therefore, in the accounting issues that generate questions, seek the support of expert companies. In this way, you will save more than one possible headache.

Accounting for small businesses one of its bases as a company. As long as finances are well managed, they can grow and reach a more relevant place in the market. If you have detailed control of income and expenditure of money, you will have very valuable information when making decisions and to mark the course of your SME.

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