If you have decided that you are going to start up a new business and you are newcomer, accounting is something that you are probably dreading. Whilst a lot of focus goes into finding quality products or offering quality services, very few start ups really research methods of accounting before they begin.
This is one of the reasons that a lot of businesses fail. If you don’t understand the financial side of your business, then you don’t understand your business at all. Here is some advice worth listening too.
You don’t need to be an accounting pro to understand the financial side of your business. Simply go and purchase one of the most simplified accounting books that you can find. If you have the foundations of accounting planted in your brain, then you are going to have a much better chance of interpreting you current financial state and also predicting the future.
For those that are choosing not to use an accountant, it might actually be worth doing an entry level course in accounting. Messing up any aspect of annual accounts can be time consuming and costly. Basic courses will cover things such as debtors, creditors, accounts receivable, accounts payable and more.
If you buy something, get a receipt; it is that simple. There are lots of things that you might not have considered that can be logged as expenses. For example, that coffee you purchased yesterday morning could have been put through the accounts as “shop sundries” whereas the meal you went for last week could have been considered a “directors meeting”.
Every receipt that you manage to put through your business accounts is going to drastically reduce you tax liability, which can only be a good thing.
Hiring An Accountant
More and more people are trying to complete their tax documents without any external help. Business owners see accountancy fees as a direct cost. There are two things they are not picking up on.
The first is that accountancy fees are tax deductible. The second is that most accountants know lots of loop holes which will drastically reduce tax liability now and in the future. For that reason, the good accountants will actually pay for themselves ten times over!
Accountants charge by the hour. Things such as receipt sorting are fairly simple tasks. Any task that you can complete without the help of an accountant is going to be money saved. This is another great reason to go on a basic accounting course.
We are not in the 90s anymore. Most tasks now are completed on an electronic basis where possible. This is certainly the case when it comes to accounting. Top quality accounting software will allow a company to log things such as:
- Job cards
- Purchase Orders
- Sales Orders
There is a perfect piece of software for almost every single business. One of the great pieces of software which has become extremely popular over the last few months is available here: www.iqretail.co.za.
Alex is an online writer that has been focusing on helping blogs develop the quality of their online content. Since 2007, he has produced over 100 blog posts which have been posted on more than 50 different websites. He loves to right about start up business issues, finance and the global economy.