Accounting Do’s and Don’ts You Should Know

Not everyone is accounting savvy yet it’s an important aspect of every business. If you’re overwhelmed with the processes of your business that relates to accounting, then the following tips below would help you a lot. If you’re on top of your finances, then you can make your business reach greater heights.

1. Balance your checkbooks.

Balancing your checkbooks is very important even if you think otherwise. Reconciling all your business transactions is an essential step, and it has to be done accurately, too. By doing so, you’ll know how much cash you have available monthly.

2. Keep a separate ledger for past due to receivables.

There will be a time that you won’t be paid back in time. Keep a separate ledger for this to track how much is owed to you. The ledger will be very helpful when you need to call up a collection service to help you with that unpaid debt.

3. Take time to check the inventory.

To keep your business running smoothly, you have to maintain a good inventory of goods. This is actually very important for startups. Take the time out to check the inventory and order new products while making sure that you clear the older ones. Doing this allows you to make the necessary adjustments so you buy more of the saleable items and less of the unsalable ones.

4. Process tax payments and payroll on time.

Taxes and payroll are two things that recur monthly. Compared to payroll, tax payments should always be paid on time, regardless of what type it is. Payroll, on the other hand, has to be reviewed before it is disbursed. But sometimes, that can be a problem if you have too many employees.

5. Correlate Profit and Loss Statements with your historical data and budget.

The profit and loss statements are great sources of information about your business. It contains detailed expenses and profits which you can compare with historical data so you can make accurate business decisions in the future.

6. Compare monthly balance sheet with the previous years.

You get a better understanding of your assets and liabilities if you compare the current month’s balance sheet with that of the previous year. You’ll also find significant changes and trends that will allow you to predict future the outcome of a certain business decision or development.

7. Review quarterly payroll reports.

The IRS in most states requires payroll reports submitted on a quarterly basis, along with other payments. Make sure that these reports are well kept or you may be hunted down by the agency. If you feel that it is too much to handle, you can hire a CPA Hialeah to help you out.

8. Fill-out all necessary IRS Forms

The IRS also requires every business to report their annual earnings as well as that of their employees and independent contractors. For that, you’ll need the W-2 and 1099-MISC, respectively. Take note of the deadline for submitting these documents for your own sake.

9. Prepare annual financial reports early.

By doing so, you also get to prepare your tax returns early. Getting your tax obligations out of the way allows you to better manage your business.

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