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Every business needs to be aware of their income and spendings. How you deal with your accounting is up to you. Here are four favored methods and how to go about them efficiently.
Invest in software to do it for you
If you’re a small business with few transactions, accounting software may be all you need to run your business’s accounts. All you need to do is keep a record of all money going in and out of your business, and the software will calculate all your taxes and expenses for you. Such software can dramatically decrease the risk of human error and speed up wages and tax returns, allowing you to get on with other more important roles. There are a multitude of different accounting programmes to choose from.
Take a course
If your business is a little more complex and requires some more specialised financial knowledge, you could save money on hiring someone for the role by taking a course. You don’t have to go to university to do this, you could take an online course or one that covers practical fundamentals even if it doesn’t leave you professionally qualified. Of course, getting taught does take commitment and will use up your time. Weigh up whether saving time or saving money is more important for you and your business.
Hire an accountant
Sometimes it’s nice to shift part of the responsibility onto someone else, especially if you don’t have a head for figures or are trying to free up time for other commitments. A professional accountant can help take on the routine spendings of your business such as tax returns and expenses, as well as taking on more complex monetary aspects such as multiple loans, multiple accounts, investments, insurance schemes and overseas transactions. Accountants can also often act as financial advisors, informing you of ways your business can save money.
Anyone can claim to be an accountant, so it’s best to check credentials. Some accountants are chartered (known as Chartered Personal Accountants or CPAs) which requires them to meet certain high standards and requirements. Many specialist websites can help you in finding a CPA.
Employ a full time member of staff
Accountants will have other clients. If your business deals with so many transactions that it needs full time sole attention, hiring a full time member of staff for the role might be your best option. For this, you will have to put all your money into a separate business account in order to separate it from your personal spendings. Putting your finances entirely in the hands of someone else can be risky, so make sure you hire someone qualified and trustworthy. You should make sure first that you have enough money to pay a full time staff member and that you have enough work to give them to make it worthwhile. Bigger businesses may have entire teams dedicated to accounting. Know when the load is too much to handle.
Sometimes I feel softwares are better for smaller businesses(as already indicated in the post) because they are less costly and easy to manage. But if you are handling huge transactions then a CA becomes must and softwares can no do all the job till you do not have complete knowledge of financial/accounting nitty-gritties.