Tuesday, March 14, 2017
Simple Business and Trial Balance Accounting Techniques for New Entrepreneurs
1. Familiarize with Rules and Standards
Every country has their own defined accounting rules and procedures needed for firms to operate under that. As a new entrepreneur, you need to be thoroughly aware of these regulations in the country or state you are operating and ask your finance and accounting department to abide by them.
2. Acquaint Yourself with Business Knowledge
Business knowledge and tactics are an integral part in any entrepreneur’s professional career. Required accounting and computer knowledge is very essential to get easily acquainted with bankers, employees and accountants. You should be able to clearly express the accounting needs to these intermediaries. Basic tools of finance like ledgers, trial balance accounting, balance sheets, income statements, etc. and their applications are highly important to go through.
3. Maintain Accurate Records
Maintaining accurate business and accounting records keeps a supervision on the performance of your business. Updated records helps in easy identifying as to which business area is doing fine and which one needs to be worked on.
4. Create a Separate Business Account
Create and maintain an account that sorely serves the business needs and correspondences. Do not mix your business account with your personal one as it complicates matters. A separate business account helps you in managing profits and expenses and allows you to keep an eye on business growth and stability. Also take care that you do not withdraw any money or related transactions for personal usage.
5. Choose The Most Appropriate Accounting Methods
Entrepreneurs can either opt for hiring a professional accountant or use an accounting software program to meet the accounting needs of their business. Both approaches have their own respective pros and cons. An accountant ensures that your records are timely updated and taxes are filled in regularly. This benefit helps start-ups reduce the risks of penalties. On the other side hiring an accountant can be quite expensive and is not considered an ideal option for start-ups unless they are earning reasonable profits.
Using an accounting software automates your day to day activities like maintain ledgers, trial balance accounting, financial statements, etc. and saves enough time for employees to work on something else. Small businesses and start-ups tends to keep small book keeping accounting packages which has features of entering sales, transactions, expenses, etc. data for day to day operations.
6. Fix Your Salary
As a business owner, you are also required to decide your salary amount. You can set your salary either by fixing the amount or by a fixed percentage. When the profits are irregular, then the percentage option is a better one. Fixing your salary keeps you from utilizing company’s revenues for personal needs.