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Working on your business — not in your business — can be a challenging task if you are unprepared. As a small business accounting firm, we have compiled a list, based on our knowledge and experience, of 10 practices that you should encourage, and 10 practices you should avoid.
Top 10 Do’s
1. Learn basic accounting concepts, such as the (differing) definitions of a cash flow statement, profit and loss statement, and balance sheet.
2. Hire a small business accountant who is going to be familiar with your industry to manage the financial assets of your business.
3. Accounting and villains offer programs can certainly help you do your job better, so find out which ones work best for you, and then use them.
4. Update cash flow control spreadsheets at least once a month, but preferably at least weekly.
5. Put in place internal controls to make sure the business receives all its income. It’s best to get accounting advice to do it properly.
6. If your business is particularly small when you first start out, it’s a good idea to handle your own bookkeeping tasks yourself. This will help you learn how bookkeeping works, and how to manage a business’s finances, even if you turn the job over to someone else as your business grows.
7. Prepare your financial statements at least monthly.
8. Reconcile bank statements as soon as they come in so that nothing gets behind.
9. Do keep personal and business financial records separate
10. For payroll and payroll accounting jobs, consider outsourcing these jobs to someone who does these services professionally.
Top 10 Don’ts
1. Don’t brag or over-inflate; be modest about your sales projections, and don’t underestimate what expenses are going to be.
2. Don’t wait to establish credit resources when you need financing. Instead, do it well in advance.
3. Don’t put your personal and business assets together.
4. Don’t delegate the job of signing company checks to someone else; do this job yourself.
5. Don’t use money withheld for payroll taxes or sales taxes for other purposes.
6. Don’t pay an invoice until you’ve matched it to the purchase order in question
7. Don’t delegate so that someone else does cash flow projections analysis; do them yourself.
8. Don’t ignore the advice from your small business accountant and lawyer on important financial matters.
9. Verbal agreements are fine, but get everything in writing, too — including purchases.
10. When you’re establishing lending source relationships, don’t delegate this job to anyone else and instead handle this job yourself.
Learn more about how our small business accountants can help you and your business. Visit us today! With our small business accounting online services, we can serve you wherever you are.
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