How Small Business Owners Can Manage Their Accounting

You should have a basic understanding of accounting if you own a small business. Knowing the fundamentals will give you confidence in your company's future, and you'll be better prepared to plan for long-term financial success. Accounting assists you as a small business owner in effectively tracking and managing your money, especially if you've recently launched your business.

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Organize your books

Begin by making a habit of compiling bank statements, recording transactions such as purchases, sales, cash receipts, and so on, and learning how to categorize them. As a new business owner, you can manage your bookkeeping needs by using a simple spreadsheet that allows you to categorize the various streams of income that your company has. Using a spreadsheet, on the other hand, can be confusing, time-consuming, and prone to human error. Furthermore, as your company grows, using a spreadsheet is no longer recommended. As a result, you may want to use invoicing or bookkeeping software like Quickbooks. There is also the option of hiring or outsourcing a bookkeeper or accountant. You must organize your company's finances in order to monitor the cash flow in your business, set a specific income goal, and lower your taxable income by tracking and deducting business expenses when filing taxes.

Choose Your Recording System

Once you've established an organized bookkeeping system, you can choose how to record financial transactions by deciding whether to use the cash basis or the accrual basis of accounting. The cash method of accounting involves recording income and expenses at the time they are received and paid, whereas the accrual method involves recording income when you make a sale and expenses when you have them. Although the cash method is simpler, it is preferable to use the accrual method because it is more widely used and provides a more accurate picture of income and expenses over a given time period.

Open a separate bank account from your personal ones as soon as your business begins to make money so that you can monitor your business's finances separately.

Your small business may begin as a one-man show at first. When the time comes to hire an employee, you must set up a payroll system and ensure that the proper taxes are withheld. You can look into accounting software that includes payroll.

Hire an accountant

When you get overwhelmed in doing and managing your small business accounts, you may want to ask for guidance from financial professionals. One of the financial professionals that you can ask for help is an accountant.

Accountants can do many things in your small business and these include the following:

  • Form your business and make a business plan
  • Help open new bank accounts
  • Audit cash flow and manage your inventory
  • Manage debts and chase down payments
  • Plan budgets and find cost-cutting opportunities
  • Advised business strategy and recommend business tools
  • Prepare year-end reporting

Get Your Accounting Questions Answered by Accountants in El Paso, TX

If you’re looking for a reputable accountant in El Paso TX consider calling us at Marcus, Fairall, Bristol + Co., PLLC! We’ll answer any and all of your accounting-related questions. We offer our clients a variety of accounting services such as the following:


Marcus, Fairall, Bristol + Co., PLLC
Full-Service CPA Firm
230 Thunderbird Dr Ste G
El Paso, TX 79912
Phone: (915) 775-1040
Email: info@marcfair.com


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