Starting a business may require perseverance, dedication, passion and formal background or education in Accounting. Once the business has been launched, you’ll need to know how to manage and get on top of the different types of accounting tasks that may come along the way. Here’s the list of 10 steps on how to manage accounting services for small business.
First and foremost, you need to legitimately register your business and consider opening a bank account to where you can deposit and stash the business income. This will keep the financial records distinct. Note that most LLCs and corporations are required to have a separate bank account for business. However, sole proprietors are not necessarily required to have a separate financial account, although business veterans significantly recommended of having one. First, you may need to open a business checking account or any savings account that will help you in planning for future taxes and organize funds in a systematic way. Next is to acquire a business credit card to start establishing firm credits. Business checking accounts may subject for a higher service fees compared to regular or personal banking accounts, so make sure to compare the fee structures.
Second, it is very important to know the solid foundation of business by keeping track of the expenses. This is a crucial step where business owner are able to monitor the performance of a growing business.
There are multiple types of receipts that you need to pay extra attention to. The following are receipts came from meals and entertainment, business travel expenses, gift statements, home and office expenses as well.
Third step would be about developing a bookkeeping system. Before establishing this step it’s important to fully understand what bookkeeping services are all about and how is it related to your accounting requirement. It is commonly known that bookkeeping is done on a daily basis by recording financial transactions, categorizing the data and reconciling bank statements. Some businesses may require a high level process to look over the progress of a business and creates systematic data compiled by the bookkeeper by building financial statements. This task can be completed by using accounting software such as Xero Accounting or outsource to an accounting services Singapore vendor that’s either local or those utilizing cloud accounting. These options provides the bookkeeping solutions that will suit your needs.
Next would be setting up a payroll system. If you’re a new business owner, most likely it’s a one person show. However, it makes the tasks and daily workloads lighter by hiring a part-time employee or an independent contractor who can provide additional assistance and has a background in utilizing accounting software. For the employees, make sure to decide and set a regular payroll schedule and provide the right withholding taxes.
The fifth step would be about the right way to investigate import tax. These types of fees may depend on the model of a certain business. Any growing businesses may need to import local goods and or purchase international goods from other countries to sell it in your local store. If you’re the one who imports local products, consider utilizing Duty Calculator which is capable of estimating the fees in your own business and plan for costs.
The sixth step would be about right ways to determine how you’ll get paid. When revenues starts to increase and roll in, you’ll need systematic way to accept payments. Shopify Payments are required most especially those firms that are based in North America. This saves your time and management and allows you to accept payments via Visa, American Express, and Mastercard. If you want credit card payments without the use of a shopify, then you may need to either utilize a merchant account or seek service from a third party payment processor like PayPal.
The seventh step is about establishing sales tax procedures. Government taxes and fees are not always constant. These taxes that legally required to be paid may depend on the location of the state, province, and country.
The next step would be about determining the tax obligation. These tax obligations may depend on the legal structure of the growing firm. If you’re self-employed, LLP or partnership you’ll be able to claim business income in your personal tax return.
The ninth step is about calculation of gross margins to determine the charges incurred to produce your products. This number represents the total sales and revenue.
And lastly, business owner may need to constantly re-evaluate their business model to be able to know how their business is performing. Simple spreadsheets can be utilized to manage your books. However, Xero Accounting software can be considered once the business step up on a higher level.