Introduction to Clean Up Accounting Mess
Being a small business owner, keeping up with the accounting and bookkeeping can be messy and quite challenging.
Keeping up with the accounts and all the invoices can be tough, and most business owners don’t realize how important they are before it’s too late. And they end up thinking, why are my accounts a mess?
Most of the entrepreneurs and small business owners think they have what it takes to manage the books and do DIY, which further complicates the matter. Accurate and Good financial management is essential for small business growth and daily operations.
How to Clean up and Fix your Accounting and Bookkeeping Mess
Is your business suffering from an accounting and bookkeeping mess? Are you finally ready to take the next big step but are confused about where to start?
If yes, then here are our top expert-recommended steps to help you clean up your accounting mess and get your business on track.
Step #1: Track All Expenses
The first step to cleaning up your accounting and books is to categorize all expenses to track the cash flow. Cash flow management is highly essential for small businesses because they often experience high expenses and little income.
Instead of counting all the receipts, consider using a credit card to make transactions, and easily track your expenses.
By tracking all the cash flows and expenses, you can maximize tax deductions and keep a check on unpaid invoices.
If you are having trouble following your expenses, consider approaching the best accounting firms in Dubai to make sure everything is accounted for and properly documented.
Step #2: Go Digital
If you are thinking about finally cleaning up your accounting mess, it is a great time to go digital and paperless. Not only will it help you reduce administration costs but also make your life much easier by having everything in digital, instead of stacks of paper with faded ink.
By having accounting software in place, you can access all transactions, credit card receipts, and all essential documents.
You can access and monitor all these important documents anywhere in the world.
Step #3: Keep Tabs on Labor Costs
Half of your business’s total budget comprises of paying employees and labor costs. Payroll comprises more than 70% of your budget during the start-up phase of your business.
Therefore, business owners need to keep track of payroll, employee perks, benefits, and overtime, to make sure everything is documented and there is no duplication. This is also essential for payroll taxes and income taxes at the end of the financial year.
Step #4: Maintain Inventory
Theft is a major concern for small businesses as it can seriously damage your company and throw off your books and accounts.
Thus, business owners must maintain proper inventory records to avoid disasters later. Avoid misplacing merchandise, take note of purchasing dates, dates sold, purchasing price, and the total number of stock.
By maintaining proper inventory records, you can make sure all the available goods and see if there is a need to update inventory or off-load expired products.
Step #5: Follow up All Receivable and Invoices
If you are thinking about cleaning up your accounting mess, It is time to chase up all the unpaid invoices and receivables.
Sending out invoices and notices doesn’t ensure that you will be paid in time. If you are cleaning up your accounts, make sure to follow up with the vendors and customers that owe you money.
By following up on invoices and receiving due payment will have a considerable impact on your revenue account as well as avoid overpaying in taxes. Offer customers early payment discounts, so they pay you quickly.
Step #6: Generate Regular Financial Projection
At this step, your accounts will start looking a lot better, and the mess will be cleared and organized. Now it is time to take measures to avoid something like that happening again.
Create financial projections because if your company is doing great right now, it doesn’t mean it will perform the same next year or a few months.
Using financial reports to project, you can estimate the financial health of your company a year or even two years down the road.
If you see some irregularities, then you will have plenty of time to apply for a business loan. Business forecasting can be challenging, so make sure to sit with your bookkeeping and accounting to develop realistic projections.
Step #7: Hire Accounting and Bookkeeping Services
One of the biggest mistakes made by business owners is when they think they can successfully manage their business financing by DIYing.
If you look closely, you may realize that your business needs professional bookkeeping services in regards to accounts management, tax payments, and debt repayment.
Outsourcing bookkeeping and accounting firms in Dubai will ensure that your books are up-to-date, and you have an accounting system at place that follows all the compliance rules and laws.
A professional CPA is well equipped to identify any loopholes or tax deductions needed for your business and also areas of growth.
By off-loading your accounting responsibilities to a pro, you can give your attention to more pressing areas like operations and business growth. This way, you can enjoy a profitable business with increased revenue.
Keep Your Books Clean!
Finance is important for business, but it is the backbone of small businesses, and without proper management, they will not survive for a day.
These are some of the ways small business owners can improve the financial health of their business and prevent the demise of the company.
Are you ready to take the next big step and redefine your accounts? Take it on with the full force and take your business beyond your imaginations.
If crunching numbers is not your strong suit, consider turning to bookkeep services for clean and manageable books and accounts for your small business.
Don’t wait for the mess to get out of hand and contact professional bookkeeping services Dubai based company today to know everything about best accounting practices and making your business profitable.
