When you run a small business accounting is especially important. The more streamlined the process is, the more smoothly your business will run. Following the necessary steps in the proper order will have your accounting department operating efficiently.

Opening A Business Bank Account

Opening a business bank account will help get you started. Not only does this make it easier to do your business taxes, it helps keeps your assets shielded. The more organized your business’s money is, the more likely you are to qualify for business loans in the future. For the ultimate in efficiency, open both a checking and savings account in the official name of your business. It helps to regularly deposit 25% of the revenue your business earns, into your savings account. Paying self-employed taxes becomes much less of a burden this way.

Keep Track Of Business Expenses

Keeping a close eye on your business expenses is one of the keys to financial success. This makes it easy to see how much your business is growing. It also helps you keep track of any expenses that are deductibles, and makes it easier to file your taxes when the time comes. With this in mind, make it a point to save the receipts for every significant purchase your business makes. Saved receipts should prove how much was spent on meals and entertainment provided to the business’s clients.

Any travel that takes you out of town for business is also something you should keep receipts for, along with expenses incurred by company-owned vehicles and the employees driving them. Receipts should also be kept for anything you purchase to use in the office, as well as any gifts you may purchase to reward employees or show client appreciation.

 Create A Bookkeeping System

Having an efficient bookkeeping system is one of the best ways to improve your business accounting. There are two types of bookkeeping to choose from. One is cash and the other is accrual. Using the cash method, you recognize business expenses as soon as you incur them. Using the accrual method, you recognize business expenses for every transaction your business completes with a customer.

For more advice on small business accounting, please contact Rushview Commercial Funding.