When it comes to running a business, one of the most important aspects of it is keeping records and accounts of all financial transactions. This is vital for having your account sin order for the end of the financial year, as well as allowing you to identify areas in your business that are doing well, as well as what areas can be improved upon.
Many new businesses tend to neglect this side of the business, waiting instead until the end of the year to try and get all of their information in order for tax season. According to the law, all business owners need to keep their accounts regularly updated and in good order.
The bookkeeping process does not have to be overly difficult or complicated, you can hire a bookkeepers service or utilise some form of accounting software.
Here are some additional tips to keep in mind when it comes to dealing with your accounts.
Make sure that all of your tax compliance obligations are in order
When it comes to tax season, you need to ensure that you are fully aware of all the different compliances that you must adhere to. Depending on the revenues of your business, you may need to register for additional types of taxes. If you have employees, you need to be registered for income tax obligations. This is when you pay your staff, but withhold a certain portion of the pay check to go to tax obligations.
Ensure that you keep all receipts
It is required that you keep all receipts for a total of five years in the case of an audit. These receipts can be requested at any time, so ensure that they are well organised. Examples of the sorts of records that you need to keep include all receipts and invoices that were rendered by your business. Record of all the payments you have made to employees and similar organisations.
All of your financial statements, such as profit and loss, as well as your income statement. All credit card and bank statements. Records of stocks and any other aspects of your business that has monetary value.
Utilise effective accounting software
In the not too distant past, all bookkeeping would have to be done by hand using ledgers and spreadsheets. This was a tenuous task that was not for the faint hearted. It could also be easy to make mistakes as there were a lot of calculations that had to be completed by hand. These days, you can purchase sophisticated accounting software that will do the majority of the work for you.
There are so many different types of software [check this list here https://en.wikipedia.org/wiki/List_of_software_categories] on the market that you need to conduct adequate research to see which one suits your specific needs the best. A good way of doing this is to find out what other businesses in your sector use for their bookkeeping. You should always make sure that you have a backup of all financial records. While the software may store them in the cloud, it is always best practice to have copies.