Keeping track of money is the most tedious part of owning a business. However, we are all aware that a business is not all selling and making money. Although that is a vital part of a business, it is (or should be) known that the success of a business relies on how well we manage the money that comes in and out of the business.
Keep reading and you’ll find out the best ways to keep your finances organized and reliable.
Time is money. This saying has never been more true especially when it comes to owning a business. In this case, it doesn’t necessarily mean time gets you MORE money, rather it means that each time a transaction is made in and with the company, it is important to take note of each date and time frame. This will be helpful for legal and organizational reasons.
Transactions are proof and it is important to know WHEN and HOW money circulates the business. This also makes sure certain transactions do not overlap or repeat and maximizes organization. A professional bookkeeper can help you stay on top of your records, while a certified accountant can help you audit and analyze your data.
Back in the day, transactions were done by hand! But that was when things are simpler. Now we have international enterprises and innovative businesses popping up here and there, some of which are fortunate enough to become million-dollar industries that try to cater to hundreds or even thousands of people.
Now, even startups and small businesses need to keep track of their transactions. Being organized right off the bat will make things easier for you when you decide that it is time to expand.
Technology has made things a lot more efficient for business owners now since it makes it easier for you to keep expanding your business. While it’s important to have physical records of transactions, it would also help to keep a digital copy and have it saved on a cloud. This way you can access transactions wherever you are in the world. Softwares such as Microsoft Excel or Google Sheets are the most common digital record keepers.
Some professional accountants may prefer to stay traditional, but some do like the change. Surely, you can find a CPA that will match your requirements.
Quick difference check! Accounting and auditing are two different things, although they are similar in what they do, they both have different purposes. Accounting is tracking, reporting, and analyzing financial transactions and this happens within the business’ closed doors. Auditing on the other hand involves a third party, usually someone within the government, to have a more objective and independent analysis. This creates credibility for the business and its transactions since it gets rid of any bias or keeps an eye out for illegal, under-the-table activities.
Auditors can also help check and recheck any financial activities that may have been overlooked from the previous financial reports. As mentioned before, each transaction made within the company is important to take note of.
Getting to know your employees is just as important as getting to know your customers. Keeping your employees’ records updated helps keep track of contributions and deductions. Maintaining employee records hold a degree of credibility for the clients since they are the ones who are present at every part of a business’ operation.
Keeping track of payroll also helps maintain organization and credibility. This allows a business to steer clear of legal issues and prevents clients from losing trust in the business.