Business Accounting, the poor parent of the entrepreneur! Yes, you have better things to do than update and track your accounting. That’s why I offer 7 tips on the essentials of what you need to know to achieve – all the same – a good accounting of your company.
Most of a company’s difficulties come from poor management / accounting .
And paradoxically, it is in this specific area that entrepreneurs and entrepreneurs make the least effort. In fact, entrepreneurs who lack training in business management prefer to spend their time on more exciting activities: selling, taking care of customers, communication, products …
What I understand ! That’s why I offer 7 tips for successful business accounting … when you have all sorts of more exciting things to do.
What are the tips for good management / accounting when you are a small business manager?
Business Accounting is not just about numbers
I put this point first because it is the most important. Business Accounting is not an end in itself, it is a tool.
The accounting of a company is not just numbers saying what you earned and what you spent. If you pay attention to these numbers, business accounting becomes a strategic tool.
This tool is useful for identifying sales and spending trends. Accounting highlights concerns whose solutions increase the profitability of your business. Accounting allows you to have the necessary information to anticipate and decide.
Changing your company’s accounting perspective to consider it as a strategic element makes this activity more exciting.
Routines for regular and consistent business accounting
A good way to manage your accountingwhen you have a small business is to make small daily or weekly routines.
Every Friday, for example, review all the expenses and all the returns of the week. Put all the checks in the bank every Monday. Track unpaid bills every Tuesday. Etc.
By reserving an accounting task a day, and by sticking to it, we are able to follow and update the accounting in an almost playful way : it is a task to be carried out among many others.
Here are some examples of accounting tasks to be performed regularly:
- Put checks and cash in the bank, check transfers, payments by credit card
- Track outstanding payments and credits granted to customers
- Enter incoming invoices (expenses) into the company’s accounting / pay these bills
- Retrieve the outgoing invoices into the company’s accounts / send these invoices
- Transmit the accounting information to the accountant who certifies the accounts
- Check the profitability of the company and its cash flow ( does it bring in more money than it gets out of it? )
- Anticipate the fixed costs of the month, those of the next month or even months (rents, wages, electricity, telephone, etc.)
- Know how much turnover you have to go back this month, next month
- Check if the increase in costs is proportional to the increase in turnover – then make decisions
- Payrolls, send wages
- Make the administrative declarations such as VAT return, taxes, etc.
I have probably forgotten important accounting elements.
Make a list of all the accounting tasks to do at home . Once you have your exhaustive list, accounting is less stressful and takes less time : you just need to perform one or more tasks at regular intervals (every day, every week, every month, …).
Understand the basis of accounting
The business accounting is a very specific jargon and all kinds of words and concepts reserved for insiders.
Do not be discouraged if you do not understand them all. Accustom yourself, over time, to the most basic concepts directly related to success. In the end, the goal is that you make profits. This is the primary goal of any business. Help a professional if you want, but do not miss the basic concepts. See the previous point: they help establish and verify your strategy.
Conversely, it is a mistake to become a super-crash of accounting : the company is not limited to its accounting. There are diplomas and professionals to do that very well. It is not the job of an entrepreneur to be a super-crash in management / accounting.
Separate company accounts and personal accounts
It’s a bad idea to mix your personal account and your business account . Separate them totally: even if you are the only partner in the business, even if only your money is put in the pot.
This clear separation makes it possible to plan, to anticipate, not to confuse personal fund and professional fund. This allows to have a lucid view of the real accounts of the company.
Finally, if your accounts are certified (EURL, SARL, SAS, SA, …), this clear separation makes it possible not to be misled in the abuse of social good: because in this case the goods of the company are not the yours. And conversely.
If the accounting performance criteria change regularly, you no longer have a benchmark for comparing periods.
It is therefore important to have as quickly as possible accounting as possible , forgetting nothing, noting everything … so as not to end up with big surprises when making the end of the year balance sheet.
Meeting the accountant regularly helps to avoid this problem. Otherwise, it’s a habit to take quickly.
Buy an accounting / management software
The advantage of these accounting software is that they force you to enter the accounting criteria validated by accountants and administrations.
Moreover, the latest versions are very educational. In doing so, an accounting / management software is a good tool, as well as a reliable tool for doing business accounting.
Some well-known brands of accounting software: Sky, EBP, SAP, Sage.
To help a professional … in time
When you enter a few thousand or tens of thousands of euros a year, the bookkeeping remains manageable mainly solo if you follow these tips. On the other hand, when you do more, arm yourself with a professional who will help you … in time .
As soon as possible is the best because you do not have the skills to know everything you need to know about business accounting .
Finally, the advantage of the professional is that it frees you time on some less strategic tasks like sending invoices, write costs and receipts, etc.
In conclusion: business accounting as a strategic tool … provided you have the information
The concern with business accounting is that we realize mistakes … too late .
If you have the information, you can decide with accuracy. You can see and plan just right.
Whether you are in charge of accounting especially at your own expense or if you hire a professional, be sure to follow the numbers and results carefully.
It’s not because you spend hours collecting invoices that you do not have to interpret the numbers … and it’s not because you entrust your accounting to someone that you do not have to look at it anymore.
Prevention is better than cure, says the saying.
Do you think of other tips and tricks for doing business accounting?