Having a quality accounting system goes a long way in simplifying your overall financial processes, whether you’re a start-up or another kind of small business.
So, throughout this article, we’ll be walking you through some of the steps you’ll need to take to properly set this up.
Define Your Financial Goals and Objectives
Before diving into some of the more technical aspects of setting up your accounting system, it’s imperative that you’ve got a clear idea of your business’s general aims and objectives.
From factors like revenue targets and expense control to overall profitability goals, having a firm understanding of your financial aspirations will generally guide your accounting efforts.
Choose Accounting Software
Generally speaking, it’s fairly unfashionable to still be managing your books by pen and paper (or even a basic spreadsheet) – especially given how much quality accounting software is on the market today for businesses of all sizes.
QuickBooks, Xero, or MYOB, for instance, are all solid options to help manage your finances; just make sure you select the platform with the most intuitive features and can integrate well with your other business operations.
Establish a Chart of Accounts
In essence, a chart of accounts is a structured list of categories that classify things like your income, expenses, assets, or other liabilities and can be customised to suit your business’s specific needs.
For example, you can have categories that include sales, rent, utilities, wages, taxes, and so on. The choice is yours, but a well-organised chart of accounts generally plays a big role in simplifying data entry and reporting.
Prepare Financial Statements
At the end of each accounting period, which is usually either monthly or quarterly, depending on your turnover, generate some financial statements to provide more insight into how your business is performing and its overall health – This includes a balance sheet and an income statement (profit and loss statement).
Seek Professional Help With Accounting Tax Solutions
If you’re relatively inexperienced and are more focused on managing your daily business operations, contact our team of financial experts at Accounting Tax Solutions for some guidance. Whether it’s tax advice or ensuring your accounting system remains accurate, we can help you navigate complex financial matters.