With the new year is upon us, it’s the perfect time for us to make resolutions to better our health, finances, or social situations.
But did you know that as a business owner, New Year’s resolutions offer you a fantastic opportunity to make some positive changes that will contribute to your future success? Especially when it comes to your finances and accounting!
So, if you’re looking to start the year right, here are some essential accounting tips that will help you tackle the daily accounting challenges of your business and get you on track for success!
Plan Ahead
As the old saying goes, “If you fail to plan, you’re planning to fail.”
As a business owner, planning your fixed expenses for the whole year, rather than a monthly basis, will help you start 2019 off on the right foot. Don’t forget to take seasonality and other potential downturns into account so you can be sure that your minimum expenses are always covered.
During your business’ peak sales months, plan to set more money aside. This will help you cover your expenses if harder times come later in the year. By getting a firm grasp on your company’s fixed expenses, you will have a clear view of your business’s future and how to plan for taxes appropriately.
You should also take this opportunity to plan for emergencies. Determine how much money you can set aside for any significant, unexpected expenses, such as losing a major client, economic downturns, or other crises. The amount of money that needs to be in your emergency fund depends on the minimum expenses necessary for your company’s survival. A good rule of thumb is to set aside at least six months worth of expenses.
But what if you can’t afford to save that extra money right now? In that case, it’s a good idea to make sure you have a line of credit set up with your bank so that if something unexpected takes place, you can use that money (with an affordable interest rate) to keep your business afloat.
Take Time to Review Your Business
Set aside some time to reflect on 2018 and determine how your revenue and profits compared to the previous year. Determine if your sales numbers are trending upwards or downwards. And ask yourself some critical questions such as, how much money did you have to spend in 2018?
Did you make a list of goals for 2018? If so, did you meet those goals? Taking the time to review 2018 should help you figure out how your company has changed over the past year. If your business hasn’t improved, analyze the figures to find out why and what you can do to see more growth in the new year.
Leverage Technology
It’s 2019, which means the days of tracking your expenses manually are over! If your business isn’t using computer software to help keep track of your finances, then it’s time to make the leap!
The good news is multiple technologies allow you to track all your expenses quickly and efficiently, so you can choose the one that will be a perfect fit for you and your company. By leveraging accounting software and cloud-based technology, you’ll be more informed about your business’ finances, saving you both time and money!
Switching to computer software or cloud-based technology will also help provide a near real-time idea of how your money is being spent, as well as the records to prove it.
Get a Head Start on Taxes
Not unlike how you should set aside money for emergencies, you should also set aside money to cover your taxes. I highly recommend meeting with your accountant at least twice a year – once in May and once in October. This way, you can get a sense of what your business’s taxes will look like in the coming year. Plus, understanding how your financial picture is evolving can help you keep up with how your business is growing and how much you’ll need to cover what you’ll owe.
By seeking professional tax planning advice, you’ll not only feel confident that your business is complying with federal and provincial tax regulations, but you’ll also ensure you’re getting all the deductions and credits your company might qualify for.
Hire a Professional Accountant
Every tip and trick I mentioned above will be made that much easier by hiring a professional accountant. Although it may seem like an added expense, hiring a professional accountant will actually save you money in the long run, plus your accounting fees are tax-deductible!
So, if you’re looking to make 2019 your best year yet, outsource your bookkeeping and accounting needs to The Number Works! You’ll receive all of the benefits of competent financial reporting without the headache of needing to onboard, train, and pay a full-time employee.
The Number Works is your one-stop shop for the best accounting in Hamilton and the surrounding Southern Ontario area. In fact, no matter where you are in Ontario, I can help your business seamlessly using virtual technology.
I offer a range of professional services including full cycle accounting, financial statement analysis, strategic planning, and taxes. Combine this with my passion for process, efficiency, simplicity, and helping small businesses succeed, and you’ve got the winning formula to help start the new year off on the right foot with your accounting.
So don’t hesitate to get in touch with The Number Works today and meet all of your business’s New year’s resolutions!