How to Keep Your Books in Order: Accounting Tips for New Business Owners – As an ambitious woman, running your own business is no walk in the park, especially in the beginning. Although women make up about 35% of the UK’s entrepreneurs, they face additional barriers to success, and many of them are financially related.
But while it may be harder for women to attract and secure funding, there’s one area that you can excel in on your own. By learning how to manage the financial aspects of your business and understanding basic booking, you can get ahead, regulate your cash flow, and boost your chances of success.
If you’re in the newbie phase of business ownership and feeling a little lost in a financial wilderness, don’t fret! We’ve got seven expert-approved accounting tips for keeping your books in order and making sure you remain sane while your business thrives.
Keep and monitor detailed records
As a new business owner, one of the most important things you can do is keep detailed and accurate records of all your financial transactions. That can include:
Monthly, quarterly, and yearly income
Incoming and outgoing invoices
Keeping track of transactions and documents like these will ensure that your financial records are always organised, up to date, and in alignment with your financial goals. It also results in reduced anxiety around finances by making you more informed and productive in your decisions—and let’s be honest, we could all do with a little less financial anxiety.
Some other extremely useful benefits include helping you regulate your cash flow, monitor various expenses, and ensure that you are paying the correct amount of taxes.
Separate your personal finances from business finances
Keeping your personal and business finances separate is business management 101. When you have independent bank accounts for your two different areas of life, it just makes managing them simpler. To make things even easier, many banks offer dual-account options.
This means creating and operating both a separate credit card and bank account for your business finances and treating them as independent responsibilities. Mixing up personal and business finances can quickly lead to confusion and errors, and make it difficult to track your business’s cash flow accurately. When the solution is this simple, why not?
Closely monitor your expenses
Tracking your expenses meticulously will also help you to identify areas where costs can be cut and profits increased. This step entails monitoring your expenses on a consistent basis, categorising them into the right places, and keeping good track of your receipts.
Expenses are the kind of thing that can quickly spiral out of control. So, watching them closely in this way helps to avoid financial haemorrhaging and ensures that you always have what you need to make it through the next season.
Utilise efficient accounting software
Technology is your friend in the business, and you can always use it to your advantage. Especially when it comes to accounting.
Efficient accounting software is designed to talk the bulk of finance admin off your hands and keep your affairs organised while you focus on other tasks.
Accounting software platforms offer a wide variety of helpful tools and features, such as:
Creating, sending, and storing invoices
Automatically creating financial reports
Making financial forecast predictions
Organising and categorising accounting files
Financial data security and storage
To make things even easier, plenty of the software platforms that offer these services are extremely user-friendly. This makes it easier for newer business owners, such as yourself, to navigate them in a simple and accessible way.
Using accounting software can make it easier to manage your finances and keep track of your financial transactions. There are loads of different accounting software options available, so choose one that fits your business needs and budget.
Outsource a professional financial manager
Even if it’s not financially feasible right now, hiring a professional accountant for your business offers many powerful advantages for your personal workflow and financial affairs.
As your business expands over time, the need for a full-time accountant will become even more clear. Unless accounting is something you have ample skill and experience in, managing it in addition to your other responsibilities can quickly become unsustainable.
An accountant can provide support in a number of areas, such as helping you to make informed financial decisions, managing your billing and invoice processing, ensuring that you’re paying the right amount of taxes, and providing valuable advice on how to stimulate financial growth for your business.
Taxes may not be fun, but they are extremely important for any business—yours included. It’s crucial that you understand which tax laws apply to your business.
This responsibility can include knowing what deductions you can make, how and when to file your taxes, and which taxes you are required to pay. Different countries have different tax laws for businesses, so it’s essential to conduct in-depth research on the ones that apply to your region.
Maintain a future-oriented perspective
As a business owner, you should maintain a strong gaze on the future. While assessing the present is also equally important, looking ahead several months or years into the future can help you make more sustainable financial decisions in the long run.
When you know where you’re headed, it becomes much easier to lay out a path or strategy for your team to follow. Keeping a future-oriented perspective can be expressed in a variety of ways, such as:
Creating a budget for future projects
Setting financial goals – where would you like to be in future?
Developing a long-term financial strategy
Don’t get lost in the past or present. Look forward and use your vision to guide your decisions in the here and now. This will make future business management much more goal-aligned.
Being a new business owner is a challenge—a very rewarding one, but a challenge nonetheless—especially if you’re facing gender-based barriers to entry. But every day, growing and evolving as a business owner gets easier, as does your confidence in yourself.
By following these accounting tips, you can help ensure that your new business is on a solid financial trajectory and has the greatest chance of success.