The Best Advice for Entrepreneurs to Organize Their Accounts
Entrepreneurs are, by nature, creative people full of ideas. However, their creative drives can become a hurdle when they try to get their accounts in order. Organizing the accounts helps entrepreneurs establish whether their innovations are truly making money, but it also helps them stay within the law and protect their interests. Here is how entrepreneurs can organize their accounts effectively.
Keep a file
Developing products and attending entrepreneur networking events are just two things that will generate expenditure that must be accounted for as a business. Buy a concertina style folder with at least 12 sections, label each section with a month, and use it to store receipts and other financial paperwork. When you balance your accounts and update tax files, your expenditure information will be at hand. Receipts are vital for claiming tax rebates and expenses.
Dedicate time
You know it is all too easy to get carried away creating products, but your accounts still need to be in order. Get organized with a spreadsheet showing cash flow and payments. Set aside an hour or two each week to make sure bills are paid, amounts are recorded on the spreadsheet and invoices have been sent; then, chase up any slow payments so the cash flow to your business is not put at risk. By setting a routine your accounts will be in order in no time. Do not forget to keep records for up to 7 years just in case the government tax office decides to do a spot inspection of your accounts.
Get advice
Accounts can be complicated, and expert advice from an accountant is worth the time for entrepreneurs. A good accountant will point out how to be more tax efficient and where you may be entitled to a grant or rebate. These rebates can be overlooked by entrepreneurs but are vital to growing income in a new enterprise. They can also ensure you file your tax forms correctly so you do not end up in trouble further down the line. Accountants will also make sense of complex tax issues and salary payments, which some entrepreneurs may find a challenge.
Watch the profit margins
Entrepreneurs often get carried away with new office equipment and other supplies when setting up a business. By keeping good accounts and watching the spending on printing, furnishings and other items, you will save up money that can then cushion those frugal months when business is slow. Get into the habit of placing a small sum in an emergency fund each month for this very purpose.
Protect your assets
Entrepreneurs need to protect their assets in two ways. Firstly, patents must be filed for any innovation that is likely to develop commercially. You should keep records of copyright ownership, patent licenses, web domains and key expiration dates so you never run the risk of losing the right to market your innovations. Secondly, entrepreneurs should also separate personal and business assets when filing accounts, which may involve establishing a separate company. Should the business fail, you may still retain your home and personal assets because you have kept business interests separate.
Entrepreneurs need to keep their accounts in order to protect their business and innovations. By following these steps, business accounts can be organized and kept up to date, supporting new developments and a growing enterprise.
By Ruben Cobos
