Accounting hacks for Entrepreneurs and SMBs

Entrepreneurs and small business owners are normally very passionate about their business and enjoy good expertise in their chosen domain. However, there are many necessary support functions that are often not their forte, hence get ignored and result in frustration and waste of time. Even at times can it lead to regulatory penalties and lost business opportunities. One of these areas is Accounting and Bookkeeping, a very important aspect of any business but let’s face it, if not a professional accountant, one doesn’t really enjoy it. In this article, we will discuss a few Accounting hacks that can be a time saver for business owners.

Keep separate business and personal bank and card accounts:

A very simple but an equally important trick is to open a separate business bank account. A separate bank account makes it easy to track all the business income and expenses. All these can then be monitored and controlled with a simple reconciliation. It helps business owners save time on accounting and eliminates the risk of missing key business expenses in the records.

Avoid cash transactions:

This is the most simple and effective one from our list of Accounting hacks. The problem with cash transactions is that, if you miss your bills and receipts, you may forget to record your expenses. If the transactions are done via bank or credit card, you will always have a second source of information to fall back to, that is reliable too.

Keep you Receipts and Bills, preferably digitally:

You will need your original bills, receipts, and bank statements if tax authorities audit you or even for your own reference at a later date. Maintaining these bills may be a bit difficult or even boring. So it is always a better idea to store them digitally by taking snaps/scans and storing Dropbox, Google Drive or in intelligent storage, like Receipt Bot.

Update your accounting books regularly:

Regular bookkeeping will help you run your business better by giving you insights on your expenses, income and cash position. By sparing only a few minutes a day you can stay on top of your business’s financial health. However, most entrepreneurs and small business owners never get time or motivation to do it. There is always something more important. However, there is good news. Now you can automate the entire bookkeeping process using online autonomous bookkeeper: Receipt Bot. All you need to do is to take snaps with Receipt Bot mobile app or forward you bills to Receipt Bot and it does all the work for you.

Do the cash reconciliation for business cash:

Though we advise keeping the cash business transactions to a minimum, it is impossible to avoid cash transactions completely. Normally cash in withdrawn and spent on as and when needed. As a result, there is no record if you have missed some expenses. Therefore it is important to maintain a cashbook and perform cash reconciliation regularly.

Use cloud accounting apps:

You will find two types of accounting solutions. The first type is those which you install on your computer or server – desktop-based software. The other type is cloud-based solutions which you can use via an internet browser. The cloud-based solution is one of our fantastic accounting hacks and these solutions are preferable as they are easy to start with and provide more features that are not possible in the old-fashioned desktop-based systems.

Use digital tools for invoicing and receiving payments:

Need to send invoices to customers? You can do it using a simple word format. But keep in mind that receivable management is more than just invoicing. You will need then manage receivables, keep track of overdue invoices, send reminders, apply receipts and send receipts to clients. Doing it all manually is pretty time-consuming. Using a cloud accounting software, like Xero, you can also add payment services to your invoice so that clients can pay instantly using their credit card or PayPal.

Understand the cost of poor bookkeeping and accounting:

Most small business owners see Accounting and Bookkeeping as non-value adding activity for their business. But in reality, maintaining proper accounting records can not only help you run your business more effectively but also can help you save quite significant money on taxes. Each expense can bring 20% saving on the tax bill and filing taxes correctly saves you penalties. Business can claim back VAT paid on expenses, and even if your business is not VAT registered, later when you register your business for VAT, you will be able to claim back the VAT paid on previous expenses.

This one it the last in our list of accounting hacks. Always remember that losing a 100 GBP VAT bill or not correctly accounting for it means GBP20 lost in a VAT claim and GBP16 lost in the tax claim.

Conclusion:

Accounting and Bookkeeping is not the core task of a business unless you are an accountant or a bookkeeper. Let’s face it, no entrepreneur enjoys doing it either. But it is a really important part of the business, as what’s the point of doing business if you are not making a profit? If your books not done properly how would you know if you are in profit or losses? However, thanks to cloud accounting online autonomous bookkeeping apps, such as Xero and Receipt Bot, bookkeeping has become totally hassle-free. Using these Accounting hacks you can keep your books intact and boost the productivity of the business.

Accounting Hacks for Small Business from Irfan Sharif