A Simple Accounting Software Can Help You Monitor Your Business Better

When handling a business, being hands-on is a good thing, but unless you’re a certified accountant, it is best to entrust your bookkeeping to an accountant and equip your company with systems that can make things easier. Many new businesses risk failure because of improper bookkeeping, so do yourself a favour and get a simple accounting software to help you monitor your business better. Below are some of the accounting and bookkeeping mistakes businesses often commit. Make sure you don’t do the same.

• Not Using an Accounting Software – Excel is a great program; it’s just not elaborate enough to handle the more complex requirements of business accounting compared with non-generic small business accounts software such as those provided by Cash Manager Limited. A software specifically created for accounting is easier to use and provides more tools for you to better assess your business.

• Not Classifying Items Correctly – Being a business owner, it’s important to know how to properly classify your accounts even if you don’t do this yourself. You should have a basic knowledge of accounting terminologies such as income statement, utility expense, net profit, gross profit, and operating expense, to name a few. Labelling your cash wrongly will yield the wrong data, so avoid misconceptions.

• Not Updating Records – Remember to ALWAYS update your records. A common mistake of business owners is when they’ve recorded a receivable and it was not paid on time, they forget to take that into account in the books. You need to adjust your records to accurately reflect that this receivable has not been paid, to properly balance your sheet.

• Not Keeping Purchase Records Diligently – Receipts and other transaction records, no matter how small or trivial they may be, must be kept for future reference. They could also be used as proof for deduction claims or tax incentives, so keep them properly labelled and stored.

• Mixing Business with Personal Accounts – Some business owners place both their business and personal money into a single account to make it “easier” for them to track their finances, but they end up with more problems in doing so. Always separate your accounts for more efficient tracking. If possible, use a different debit card for your personal transactions and record out-of-pocket expenses properly.

• Not Keeping Backups of Records and Files – After using your simple accounting software, save the file immediately and label it with the right date. Then, create one or two backups (also with proper labels) and lock them away or save them in a password-protected folder. When creating backups, make sure that you have both a hard copy and a soft copy, and tell only the people you absolutely trust where you kept them.

Running a business is much harder than people expect, but with the right technology and employees, operation could be a breeze. A smart business owner will invest in products and software that would make running their business easy. Are you a smart business owner?

Sources:

(Top 10 Bookkeeping Mistakes Made by Small Businesses, allbusiness.com)

(6 Accounting Mistakes That Put Small Businesses at Risk, articles.bplans)

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