Running a business is no easy feat, involving day-to-day operations, marketing to accounting. While accounting for businesses may not be the most exciting area, it is a crucial part of the business. Accurate accounting and finance for your business are beneficial for your business’s long-term growth. Being able to identify profits and cash flow is important to grasp what business owners need to have. Here are 4 basic accounting services tips to level up your finances and grow your business.
1. Tracking Cash Flows
Accounting your company’s financial situation is not only maintaining a record of your expenses and revenue. Without a clean business’s financial state, it will be challenging to seek ways to improve your business. Tracking your business liquidity levels allows you to better understand your payment cycle and effortlessly plan for your growth plans. Having accurate and factual cash flow statements allows for precise future business forecasting.
2. Factoring Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) is the cost of operations that a business incurs to generate revenue. This factors every amount involved from acquiring to the sale of the final product. Some business owners forget to include labour costs and rent in COGS. Ensuring an accurate business accounting record of fixed expenses reflects the total amount to make your gross and net profit calculation easy.
3. Keeping Bank Accounts Separate
It is critical to separate personal and business finances from getting mixed up. With different bank accounts, it also makes accounting for your business easier. It is especially true during tax filing time. Moreover, when your business grows and requires funding from investors and creditors, keeping strong and clean business financial records can improve the likelihood of investments. But before you head down to any traditional banks to start an account, research the various businesses and compare their fee structures, the benefits of specific options, and the cost of running the account.
4. Develop an Accounting System
Bookkeeping and accounting are two vastly different aspects of small business accounting and finance. Bookkeeping is the daily process of detailing transactions, categorising them, and reconciling bank statements. Whereas accounting for your business is a more in-depth overview of your business’s finance data in the form of financial statements. As a business owner, you can decide how you want to develop your bookkeeping system. Here are some ways you could consider:
- Doing it yourself with business accounting software, or simply with an Excel spreadsheet to keep track of your accounts payable and receivables
- Outsourcing to a part-time bookkeeper who is based locally or is cloud-based, allowing you overview access to the shared cloud software
- Hiring a bookkeeper or accountant in-house while providing system applications.
Need help with Accounting and Bookkeeping?
At Lanturn, we’re committed to simplifying your financial processes and maximising your business growth. Plus, our cloud-based technology ensures you can manage your finances easily, from anywhere, at any time.
Contact us today to learn more!