8 Accounting Tips That Will Help Every Business Owner

When it comes to business, every business owner knows that accounting is one of the most important aspects. An experienced accountant can be of great help for a business, especially for a new one. On the other hand, a less-experienced accountant can do more harm than good. If you are a business owner who wants to become more familiar with the art of accounting, then you are in the right place! In this article you will find 8 useful, business-related accounting tips:

1. Develop Your Business, but Do Not Forget About the IRS

IRS is an acronym which stands for “Internal Revenue Service”, the institution responsible for collecting taxes across the territory of the USA. In order to avoid financial problems and all the consequences they involve, every business owner must file what is known as a “personal income tax return”, a declaration that must be made annually. The tax return is used by the IRS in order to assess a business owner’s liability for taxation. If you fail to inform IRS about your annual income as a business owner, it may levy penalties and interest in the long run. Better be safe than sorry!

2. Calculate the Main Expenses

A very large number of new businesses go bankrupt within several months of activity simply because the owner or the accountant did not keep track of the expenses. It is of utmost importance to plan the major expenses several months in advance – this way, you will prevent unpleasant situations. In addition, do not forget about all the equipment you may need.

3. Regular Balance Sheet

Preparing a balance sheet on a regular basis is certainly a great idea – this way, you will be fully aware of all the liabilities and the assets of the business. Most business owners prepare an annual balance sheet, but some say that preparing a bi-annual one is a lot better, since it helps them keep track of their financial status and also monitor the progress of their business.

4. Use Reminders

Electronic reminders are great, and the most important thing is that you can find some programs that are free of charge. Why do you need one? It’s simple! When you have a business and you struggle to make it work, the hassles of paperwork can make you forget to pay taxes and bills. This is where reminders step in and tell you when it’s time to pay your utility bill, so you do not have to pay late-payment penalties.

5. Be Aware of All Your Expenses

As stated above, it is essential to calculate your main expenses. Nonetheless, don’t forget about the secondary expenses, such as advertising expenses. Advertising is essential in order to attract customers, since no business can survive without a continuous flow of customers. This is a long-term investment that will double your profit in the future, and there are numerous advertising companies which can help you calculate ROI, or the “Return On Investment”.

6. Calculate Your Deductions

This is definitely one of the most important tips on this list. Never throw away receipts of your monthly expenses – you will need them when you calculate your tax deduction.

7. Purchase Accounting Software If You Need One

If you feel like you need accounting software to make your job easier, buy one! Never skimp on software, though – quality never comes cheap. Accounting software can be of great help for any business – they allow fast and safe data storage and they also help the accountant find files easier. Nonetheless, don’t jump on the first software you find. Instead, do some research and you will certainly find a wide variety of accounting programs on the Internet at very affordable prices.

8. Use the Internet to Your Advantage

If you have a customer database and you want to send monthly newsletters, use the Internet to do so. Keep in touch with your customers using electronic mail instead of traditional mail. This way, you protect the environment and you also save money (with traditional mail, you would have to spend money on paper, envelopes, etc.). Besides, e-mail comes with another important advantage: it allows better tracking.

To summarize, these 8 useful accounting tips can make your business blossom in no time. In a nutshell, do not forget to pay bills and taxes on time in order to avoid penalties, keep all the receipts for tax deduction, invest in high-quality, trustworthy software and focus on e-mail rather than traditional mail. These tips are simple and cost-effective, and they will make your life a lot easier, as a business owner.

Wanida Sasiprapa is a business writer and an accountant living in Bangkok, Thailand. She’s been working lately on her Accounting Myanmar business.

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