How can you take your financial accounting to the next level?
For entrepreneurs who are not trained accountants, financial accounting tasks are often viewed as nothing more than an afterthought. Business builders want to focus on creating new business opportunities and often don’t appreciate the importance of meticulous record-keeping. They figure that if they feel the need later to see a profit & loss report, they can handle it when the need arises. Failure to record transactions and generate useful reports in a timely manner can be just like shooting your business in its proverbial foot.
Even if you don’t have a trained bookkeeper or accountant on your team, there are some crucial accounting steps that cannot be overlooked. Skipping these important steps dooms your company to financial ignorance, which is never good for business. It might take a little planning and effort, but following through on the most basic financial accounting tasks will keep you apprised of your company’s financial footing.
To help you improve your accounting habits, here are three awesome tips about financial accounting for your business:
- Systemize the process. Keeping track of accounts receivable is tedious, so it often is put off for later. Missing important steps in the paperwork can cause you to generate reports that don’t make sense. Select a day each month to apply payments to accounts receivable. Better yet, set up a system whereby customers can make payments online; this will automate the receivables process, remove the burden from your shoulders, and help keep your records clean and accurate.
- Track every expense. It seems like people and businesses rarely use cash anymore. But if you ever do make a business-related purchase with cash, be sure to get a receipt if possible. At the very least, make note of the expense right away so that it can be recorded in your accounting software. Failing to do so will result in reporting lower income, leading to a higher tax bill than you should have to pay.
- Hire a pro to help. Hiring a financial accounting expert for your business can actually save you money in the long run. Putting a pro in charge of your bookkeeping and reporting ensures clean, reliable record keeping. If you are ever in a position to bring aboard new investors or face a tax audit – heaven forbid – these processes will be made much easier with expert financial accounting records on hand.
The importance of generating financial accounting statements that comply with generally accepted accounting principles (GAAP) cannot be overstated. Owners and stockholders expect to see financial reports on a regular basis, as do some lenders. The reports that must be generated under financial accounting rules include:
- Income statement, also known as a profit and loss (P&L) statement
- Balance sheet, also called a statement of financial position
- Statement of cash flow
- Statement of stockholders’ equity
If your company’s stock is publicly traded, your financial accounting reports must also comply with the requirements of the Securities and Exchange Commission (SEC). Your company’s financial statements and other reports will likely be widely shared, and they could reach secondary recipients such as your competitors, clients, staff, and more. Following strict reporting rules, meeting deadlines, and fulfilling the expectations of your stockholders are important for ensuring the health and success of your company.
Accounting Partners knows what’s important to you; that’s why we staff the very best financial accounting experts in the field. Our pros are highly trained and experienced in a variety of accounting areas. We can help you stay on track by handling your bookkeeping, reporting, and tax-related tasks for you.
Call Accounting Partners at 888-743-3080 for a free consultation to learn how a financial accounting expert can help your business thrive.