Have you updated the way you do your accounting recently? The competitive landscape for your business is constantly evolving. Consider new ways to keep your small business accounting on track.
What should you pack in your bag of accounting tricks? Try these seven basic accounting tools for a financially healthy business.
1. Basic accounting software
With basic accounting software, you can record all your business’s transactions in the same place. You do not have to worry about losing paper receipts or spending hours filing documents. Use accounting software to track your expenses, income, liabilities, and assets.
Accounting software calculates your account totals for you. Some software companies even file and deposit your taxes for you.
Cloud accounting software offers the freedom to access your books online. It allows you to do your accounting from anywhere with an Internet connection.
2. 1099 software
1099 software allows you to print Forms 1099 and 1096. You use these forms for tax purposes. Have your vendors and independent contractors fill out Form W-9. Use information from Form W-9 to fill out Form 1099-MISC. You should send copies of Form 1099 to the independent contractors and the IRS.
Some 1099 software programs have online payment options. You can pay vendors and independent contractors at any time from anywhere with an Internet connection. Keep all your contractor information organized with 1099 software.
3. Invoicing software
Invoicing software programs can help you create an effective system for collecting payments. That means you might receive customer payments faster.
By using a uniform template, you can quickly create and send invoices. You should be able to record which customers you invoiced and which customers paid you in the software.
4. Business credit card
Business credit cards for startups can help you separate your personal finances from your business expenses. Separate accounts are important for compiling financial records and filing taxes, and is a huge addition to your collection of basic accounting tools for small business.
Expenses of a business include some tax deductible items. But, personal expenses are not tax deductible. You must prove to the IRS that business expenses are purchases made for business operations.
Many small business owners use a business credit card to help finance their companies. Business credit cards may offer special benefits, including higher spending limits than personal credit cards. Before getting a business credit card, make sure you read all the terms of agreement. In some cases, there are certain steps that you can take to acquire business credit cards without personal guarantee.
5. Business bank account
You will want to divide your personal and business bank accounts. Do not include any personal transactions in your business savings or checking accounts. By using a business bank account, you can accurately track your business’s costs and income. Compare your bank statements to your personal financial records.
A business bank account can save you time when you file small business taxes. You do not have to go through your bank statement line by line to figure out which transactions are for your business. You can use one bank statement to report your business’s deposits and withdrawals.
Business bank accounts offer several benefits to small business owners. The bank can help you finance your business. Although business bank accounts are fee-based, fees are tax deductible. You may also be able to accept debit and credit card sales from your customers with a business bank account.
6. Financial calendar
Scheduling your financial responsibilities on a calendar helps you remember deadlines. Include IRS due dates, days to compile your records, and meetings with your financial advisors.
Use a hard copy or online calendar. With an online calendar, you may be able to program reminders about approaching deadlines. Check your financial schedule often and plan ahead for upcoming due dates.
Chances are you will need an accountant for small business to help with your books. An accountant can help you beyond the basics of accounting, so you can focus on pursuing small business growth strategies.
By analyzing your numbers, an accountant can show you which financial decisions are working (and which are not working). An accountant can organize your books, file and deposit taxes, and give you financial advice.
Basic accounting tools for small business
This year, make sure you are prepared to handle your accounting. Choose basic accounting tools that will help improve your small business’s financial health and add value to your company.
Do you need a new way to track your business’s transactions? Try our basic small business accounting software for free today.