The four accounting tips for every small business owner are as follows:
1. Keeping the personal and business Finances separately
Other than the income and other funds of a person kept aside in a personal account, and owning a business means that the business-based finances will be combined with the personal funds. To avoid such a combination of personal and business finances one should always open a separate bank account for all business-related transactions.
2. Review of Account
Business Owner generally come to trust the person who is handling the accounts. But this should mean that the business owner should stop looking into the books of accounts. It is very important that the owner should review the books of accounts on a regular basis to avoid any kind of manipulation later. Also reviewing the books of accounts helps the owner to understand the current working situation of the business, whether there is a need for improvement, and where the resources are required to be allocated. Moreover, the review of the books should always be done at unplanned and unscheduled hours to ensure proper maintenance of the books of accounts.
3. Details of Tax Paid
Irrespective of the type of business every small-scale business owner should be aware of the amount of tax paid to the government. The taxes paid are generally personal taxes if it is a case of a sole proprietorship, so it is always advisable to have proper knowledge of the expenses which are to be deducted, the kind of tax payable, and the tax rate. The government advises getting a GST Registration in India for the business to avail the tax benefits with respect to business and other related aspects. To have hassle-free registration now the government has provided the services of Online GST Registration of businesses.
4. Maintenance of annual cash flow
The business owner is required to have a proper record of the cash flow both annually and monthly of the business. To take a good decision with regard to consolidation and expansion of business the business owner should have a sound knowledge of the cash flow cycle of the business. A proper monthly cash flow cycle will help the owner to properly plan the daily activities such as when it is needed to develop a new feature or any value-added services, and when it is required to promote the product in the market.
Conclusion
one should have a basic knowledge of all finance and accounts to properly utilize the resources available in the best possible manner. The business owner should always be prepared in such a way that in case of any obstacle, the business is not affected. To avoid such kind of obstacles the business owner should look into the above-stated tips to avoid any hindrance in the running of the business.
Original Source: https://medium.com/@priyasinghblogger2/4-accounting-tips-for-every-small-business-owner-aa24c8de8124
