Managing accounting is just one of your business owner responsibilities. But for many, it can be overwhelming and nerve-racking. Your first instinct might be to outsource all your accounting tasks to an accountant. However, there are many financial tasks you can, and should, manage on your own.
Financial business owner responsibilities you can manage
When you manage basic financial tasks, you can save money, keep your business in check, and understand your business’s financial state.
Then, you can pass along records to your accountant, who can help you interpret information and provide business advice.
Here are some financial responsibilities of the business owner job description that you can do without too much time and effort.
Recordkeeping is one of your owner responsibilities. It’s something you must do to protect your small business against discrepancies in your books, audits, and even lawsuits.
Keep documents like your receipts, tax returns and contracts.
It’s also important that you maintain accurate accounting books. Choose between the cash-basis and accrual accounting method to record your transactions.
Cash-basis accounting is the easier method and requires that you only record transactions when money physically changes hands. On the other hand, accrual accounting uses a double-entry bookkeeping system so you can record transactions when your business incurs them.
Tracking your business’s income and expenses with an easy-to-use and organized system will simplify your recordkeeping responsibility. Instead of stuffing papers in a cabinet drawer, you might try an accounting software program to manage your books. That way, you have your records in one, organized location.
2. Invoicing customers
Invoicing customers is a relatively simple financial task. And, it is a necessary component of the small business owner job description if you provide a product or service before collecting customer payment.
What is an invoice? An invoice is a bill you send to customers to ask for payment. Sending invoices reminds customers that they owe your business money. Invoices show customers how much they owe, what they purchased, when the money is due, and how to pay it.
Invoices also play a part in your recordkeeping system. They act as records that show you who has paid and who has not. Tracking unpaid invoices and reminding customers they still owe you money can speed up cash flow and help prevent bad debt.
3. Monitoring business bank accounts
You might already know that having a separate bank account for business helps with accuracy and organization. Opening and monitoring your business bank account is something you can handle on your own.
Opening a business bank account comes down to choosing a bank, gathering documents, and opening the account. The process is pretty straightforward, and you can always ask the bank questions.
Once you open the bank account for your business, be sure to monitor it. Checking the funds you have in your account, either online or using a mobile app, helps you observe changes in funds. If your account is compromised, you will be able to catch it and notify the bank quickly.
Monitoring your business bank account can also indicate if you are spending more than you’re earning. And, you can reconcile your bank account with your accounting books to make sure everything is accurate.
4. Cutting back business expenses
When you’re looking at your business bank account, accounting books, and receipts, you need to pay attention to all your expenses. If you’re racking up business expenses that have a low ROI (return on investment), it might be time to cut back.
Determine which expenses you can live without and eliminate them. Determine the expenses you can reduce. And, find out if you can get better deals with other vendors.
If you can get better rates from another company, it might be time to take your business elsewhere. Or, you might look into wholesale buying to get products in large quantities for less.
5. Creating financial statements
Financial statements are documents that display your business’s financial information for a certain period. You can use the statements to determine the health of your company.
Income statements, business balance sheets, and cash flow statements are the three main types of financial statements you should use. Here’s a little more about them:
- Income Statement: Displays your business’s profits and losses
- Balance Sheet: Shows your business’s assets, liabilities, and owner’s equity
- Cash Flow Statement: Measures money flowing in and out of your business
As a small business owner, you can use numbers from your records to create your financial statements.
Ready to take matters into your own hands? Patriot’s online accounting software helps you stay organized and maintain accurate records. Track your income and expenses, invoice customers, and pay your bills with a system that’s designed for the non-accountant. Get your free trial today!
This article is updated from its original publication date of June 26, 2018.This is not intended as legal advice; for more information, please click here.