Little changes make a big difference for small businesses because their owners tend to have all the responsibilities and not enough time to meet them. Tools like automated online accounting software that decrease workload exemplify an important strategy for small business efficiency: organizing resources, information, and effort. Just as small business accounting software helps organize financial data and is superior for bookkeeping and generating accounting reports like the profit and loss statement, there are superior ways to manage spending, accounts, and expense tracking, by organizing your actual money.
At the simplest level, you need to have a separate checking account and credit card for your business. If you're serious about it, this basic step to organize your business finances separate from personal accounts will make bookkeeping and accounting easier, which you or your accountant will especially appreciate for tax preparation. You should deposit all business income into this checking account and pay for all expenses using money withdrawn from this account or the company credit card. That includes "paying yourself" whatever the business can afford. Even if your small business isn't incorporated in such a way that you can claim yourself as an employee, separated finances this way is worthwhile for the efficiency and convenience it offers.
If you accept online payments, you should also have a separate merchant account for eBay and Paypal. They might charge you fees, but you'll be able to deduct those as a business expense, and it makes it easier to set everything up so that all your payments and expenses stay compartmentalized. This also supports your ability to control spending with petty cash. When you are certain that all the money going into the business checking account is from business-generated revenue, you can confidently withdraw cash from that account for things like parking fees at trade shows or petty cash to pay for the dinner you had to order for your friends helping you stuff envelopes, knowing you're not creating unnecessary or extra paperwork.
The final benefit of this strategy is that it maximizes the power and effectiveness of your automated online accounting software. Once you synchronize all your online financial accounts - eBay, Paypal, your credit card, and your checking account for example - with the software, you know that every transaction will be recorded. By controlling how you get paid and spend, you're eliminating the chances of a transaction slipping through the cracks. The higher the integrity of your accounting data, the more useful it is for everything from tax preparation to making business decisions.
Online accounting helps organize finances and reduces the bookkeeping burden for small businesses. But you've got to take proactive steps to organize your business transactions at a more fundamental level to really get the most from these tools.
Online Accounting and Account Organization Can Help You Keep Your Spending and Business Expense Records in Order. Get Help with Online Accounting at http://www.outright.com
EasyPublish this article: http://submityourarticle.com/articles/easypublish.php?art_id=278994