It’s easy to put tedious tasks such as organization and accounting cleanups on the back burner. However, over time, these tasks will build up and become even more difficult to manage, no matter how many tricks you have.
A better more effective way to work with your business income and expenses is to file them as they occur. This can achieve through multiple different avenues, which we’ll explore in today’s article.
Keep Personal & Business Expenses Separate
Sometimes we make personal purchases from our business accounts. There is no problem with this, but if you fail to log the details, they can cause headaches when it comes to doing your taxes and accounts. It’s far easier and less time-consuming to keep personal accounts for personal purchases, and to perform all business-orientated transactions through a business bank account.
A lot of business owners forget that all activity that goes through their business accounts must be logged when filing their tax returns for the company. Small personal transactions that aren’t noted down often cause the most fuss, since business owners don’t know what the purchase was for, since it wasn’t business related.
For example, if you bought a scooter for your child from your business bank account, you may not remember or recognize what the purchase was on your bank statement, and it’ll take you a lot of time and effort to draw out what the activity was.
Use A Professional Service
Professional accounting services come in two main forms these days:
1. Accountancy Firms
2. Software and applications
Accounting firms or solo accountants have been around for many years. They’re still one of the most effective solutions for business owners who either don’t employ in-house account managers or don’t have the knowledge and time to file a company tax return themselves.
As long as you keep records of all the activity that goes through your bank regarding income and expenses, you can simply hand everything over to your accountant and have them go through the data for you to keep things organized all year round.
In this day and age, you can now use online accountant services. However, you need to ensure that the firm you use is in India. Make sure they are aware of all the relevant rules and regulations, as well as tax laws.
Softwares & Applications
Software and applications are newer to the scene. Through the business owner or an in-house account manager, all data and activity can insert into software and applications that will sort and filter accounts, making them easy to file, organize and send off to an accountant if you wish. This activity can complete daily, weekly or monthly to keep things organized. So the time scale you use will depend on the amount of transactions your business makes.
Apps such as “BizXpense Tracker” are very easy to use, and also have a time tracker built into them that can record data for hours and time worked by employees. If you want to generate easy reports for your accountant, this app exports files that display information easily and in an organized fashion.
Start to use an online accountant, software or application, it’s highly recommend that you use a secure connection via a Virtual Private Network. If you log your activity through an unsecured network, your information will be vulnerable to hackers, and this is certainly not the kind of data you want in the hands of strangers.
Time to Get Organized
Overall, to keep your business income and expenses organized all year round, you must stay on top of all transactions as often as possible. To do this, ensure that you record data as it comes through via an in-house accounts manager, software or application, or employ an accounting firm.
Approach your accounts with a mindset of “little and often.” Otherwise, you’ll soon find that you have a heap of transactions and activity to go through. This is both a major headache and a good way to make a mistake, which can have significant consequences for you and your business down the road.