When you hear that as a small business owner, you’re now in charge of your business’s accounting—don’t be scared. Is it not just basic multiplication?
Maybe and a little more details; anyways, if you’re able to grasp the concept of basic accounting and bookkeeping, you will be able to understand your small business’ strengths and weaknesses.
Having bookkeeping and accounting knowledge is beneficial to help you boost your business growth.
This article aims to put you through some tips that can help you learn proper bookkeeping and accounting skills to prepare you for the business growth that is to come. They are:
Get a business bank account- Separate all your finances!
Time and time again, we have preached basic financial knowledge to you, and we hope you listen and take notes—separate your personal finances from your business’s finances. There are several reasons why this is really important to your business
- Brand positioning
- Access to finances
- Makes your business more trustworthy
- Accounting Made Easy!
Read more about separating your finances.
Choose how to report income and expenses-
I’m sure you already know your income and expenses, but do you know how to record them? Generally, in accounting and business – in general, there are several methods you can use to keep records. However, we will highlight the most recommended way which is;
- Cash accounting means recording revenue, income and expenses when payment has been made. Nothing is recorded into your cashbook or financial reports unless that customer has paid in full for the service or product you sold.
Pay yourself a salary.
For small business owners in Nigeria, it’s pretty common to forget to pay yourself a salary or not even pay yourself at all. But understand that it starts to affect your accounting. If there is no structure in place for your business profit and income, there’s a high chance you’d lose track of your accounting.
A clear boundary needs to be established, what will be used to grow the business and what is for your hard work.
The pros of this are that it makes your life much easier. It makes it easier to stay within your budget lane and more straightforward to continue to separate your business finances and personal finances.
Get a bookkeeping and accounting software.
In business, bookkeeping is essential because it determines the health of your business, your growth, Conversions, Return on investment, and your performance over some time.
For your business to grow, you should understand how to measure if its health and performance tally with your business goals. It is important to measure business metrics and record your business expenses which includes sales, expenses, debts, cash flow, etc.
An easy-to-use accounting software tool is Simplebks. Business owners can easily-
- Record transactions from multiple channels.
- Keeps tabs on the details of your inventory
- Issue professional invoices for your small business.
- Autogenerate profit and loss statement.
Create a business budget
This is very important; if you don’t want to run your business into the ground by freestyling on your monthly expenses, then you should sit down and come up with a budget. This gives you a safety net to know whether or not you are overspending and if you’re even making a profit. It’s just one of those business tips that are indisputable.
Finally, after we have established why you should adhere to better accounting, we hope you can learn a thing or two from these accounting tips.
Run your business with Ease,
A crucial part of what Simplebks does for your business is analyze financial reports to help you make better business decisions; help you understand cash flow. And overall, it gives you insights that reveal the bigger picture of how your business progresses.
Accounting Made Easy!