99.9% of businesses in the country fall onto the category of SMEs. They are the main source of new jobs, but it requires great teams and leadership to open a new shop and keeping it open.
According to data collected by the Bureau of Labor Statistics, 20% of the new businesses close in their first year. The reasons may vary between industries and cities, but all of them have a thing in common they should care about: Administration of resources.
We share with you some elements related to bookkeeping that should be looked at if you are an entrepreneur or if you are thinking about becoming one.
1. Daily register of income and expenses
Identify where your money is coming from and where it is going. Having an accurate record of how much money you have as a business is powerful data that will help you during the decision making and to point out which strategies aren’t working out or if your client credits are too many.
2. Inventory control
One of the biggest expenses of your business will clearly be your product and raw materials. Having a registry of how many you sell each week will help you schedule more wisely how much you need to buy to satisfy the demand. Foreshadow important dates to your business such as holidays that could mean an increase in sales and prepare in advance for them.
3. Be aware of the cash flow
Cash flow is a metric that tells you the money you have available to cover debt or short-term expenses. It may get lower if you buy new equipment, increase your work team or give too many credits to your clients. identify the minimum of cash flow required to cover your expenses and be able to restock.
4. Know your tax responsabilities
Mark the important dates published by the IRS so you can start preparing the paperwork in advance.
5. Save important paperwork
All the tickets, invoices and other receipts that prove your expenses and income will come useful at the moment of updating your accounting ledger. Even when working on your taxes paperwork you may need to consult these files and receipts.
6. Get a new bank account for your business
It may sound obvious, but in order to organize your business budget separate it from your personal account. This division will also make it easier to do the math when the taxe’s due date comes.
The more data you collect, the wiser and informed your decisions regarding your business will be.
Nowadays there are many ways to fulfill the elements of bookkeeping we saw today, via apps, software or accountant books. For starters this may be enough, but as your business starts to grow this bookkeeping activities may start to build up as well.
Maybe consulting with accountants may be great for your business, as it saves you some time you could use to plan new events or create networks with your communities. ATS Consulting is here to serve your small business needs.