5 small accounting tips for young businesses that will make a big difference

A proper business accounting system is an important part of business infrastructure

By Nicola Joseph

Where do you see yourself in 5 years time? Hopefully it's on some tropical island in the middle of the ocean, but even if you don't find that level of success you will still want your business to be running along smoothly. You will need to sort your finances out if you want to stay in business because even if you're making money you can still go under because of an accounting error. Take a look at some of the things you never want to forget.

Keep things separate

They've said for years that it's a bad idea to mix business and pleasure. It turns out this advise can be used in a lot of different situations and one of them is when dealing with your finances. The reason we have a separate business account isn't because having two different cards makes us feel special. It's because you can manage your finances so much easier. You also won't feel like you're chasing your tail around the room as soon as it's time to pay your taxes.

Use great software

What do you do when you want to publish a picture of a product on your website? You certainly don't draw the product on a piece of paper and scan it onto the computer before publishing the scanned image on your site. You take the photo with a digital camera and you edit it using software before it's ready for the world to see. I don't want to dwell on this too much because you don't need to know 

what software does. Just know it saves you lots of time, money, and hassle.

Hire a professional

The reason people become great is usually because they spend a huge amount of time working on their business. They don't spend too much time in it doing all the grunt work. When you have money available you pay someone to carry out the jobs that don't bring in any income because it means you can spend all your time doing the jobs that do bring in money. That is why hiring someone to look after your books should be done quickly even if it's not full-time.

Make the time

How many hours do you spend on the golf course every week? You probably spend ever more time than that sitting on the couch watching TV. Looking over your finances isn't pretty and you certainly won't have fun while doing it, but you've got to make the time even if it's just a quick peek at your books every week. Even if you don't do the books yourself it's still good practice to have a small idea of what is going on at a basic accounting level because money is important.

People should be paying

You might think this last one is a joke because it's a little silly, but people actually forget they should be getting paid. If your clients and customers don't send you money when you bill them you will need to send them a follow up. You will need to keep doing this until they pay. Of course you already know this, but it could slip your mind. As long as you don't forget a business needs to get paid you should be fine, but if you do forget more than once it can seriously mess up your finances.

You can do it

Do you think anything we've talked about today sounds complicated? It shouldn't because the general running a business is easy. Finding out exactly what people want and persuading them to hand over money is the only hard part. That means you don't want to spend all your time dealing with the financial side of things because of mistakes you keep making.

About the author: Nicola Joseph, the author of this article, work with, Reckon Store Next Door, leading providers of online accounting software. She loves the outdoors and loves going camping and hiking on weekends. 

Image license: Peter Baskerville, CC BY-SA 2.0