How to start your small business accounting?

By March 27, 2019Financial Services

Accounting is one of the main concepts involved in any business. It includes measuring and processing all financial data to provide information to the owner about the resources available, how those resources are financed and the resulting advantages or disadvantages from their use. The main function is to prepare a record of all financial dealing of the company and to analyse the bookkeeping data to assess the health of the business. After officially registering your business you need to open a bank account to hold any income that you may generate. Usually a business checking account is opened first and you can later open up a savings account to generate further funds. You can look around various banks and compare their fee structures to choose one that fits your budget.  To further progress into the accounting of your small business you need to take the following steps: 

  1. Learn to keep a track of all your expenditures. This is very important in overseeing the progress of your business as well as building financial statements and prepare tax return Melbourne. You should always keep the receipts for any meals or entertainment conducted for the business, travel and gift receipts and any vehicle related expenses. Starting your business at home can help eliminate any overhead costs and you can deduct the costs of incurred from that of your home.  
  2. Start a bookkeeping system which keeps a daily record of all the financial transactions that take place. This data is categorised into financial statements. You can use a part time bookkeeper or simply keep a manual ledger to record all dealings. A computerised system can also be implemented where you record data onto a spreadsheet. You can always hire a small business accountant Melbourne CBD to help you in your accounting procedures. You also need to choose between an accrual or cash method of accounting. The cash method calculates all expenses when you receive the payment for them. The accrual method recognises the transaction from billing the payment even if the cash is not received.
  3. Create a payroll system to calculate all dues of your employees if you choose to hire them.  
  4. If you are planning on importing goods from other countries then you should know of any taxes and duties that are imposed on those products.  
  5. You need a way to accept payments when you start selling. You can set up a credit card system or an account for receiving payments. 
  6. Keep track of all the taxes you will have to pay such as sales and income tax. 
  7. Calculate your margins and revenue. As you grow you may need to change your methods and move onto quicker bookkeeping solutions. 

To help you in the process of your accounting, it is always a good idea to hire a small business accountant from Melbourne CBD or other areas. They help you in establishing a proper system which can kickstart your business as you will have your finances in order. The accountant can keep an eye on all financial reports for you and analyse them to allow a better understand of your business.  These experts have immense knowledge about all things related to finance and can give you great advice on how to grow your business. They can effectively predict the impact of any decisions you make on your cash flow so that you don’t run out of money at the wrong time. Efirm provides skilful business accountants from Melbourne CBD that can help you through your tough business times. If you have launched a business on your own then these accountants are there to reassure you and listen to any problems that you may have. They can tell you the difference between good and bad debt and help you get financing if the occasion arises. Accountants are always up to date about the new regulations and tax that impact your business. They can help you keep your business model current. They will oversee the payroll and save you the headache of calculating exemptions and overtime.  

Small businesses are always on the road to growth but things can go wrong if you expand too early. With their expert financial knowledge, accountants can inform you about the right time to grow and then manage the changes without a hitch.  You can avoid costly mistakes and keep your business on the right track.