This is one of the areas that I have very little knowledge of
, and am not afraid to admit that I am totally useless
when it comes to accounting. Fortunately, this does not need to be of great concern these days with the technology we all have at our fingertips
(the trusty PC) and the plethora of beanies
(accountants) around looking for business.
The whole idea is to keep track of money coming in, and money going out. There are several underlying details regarding taxes etc that you will soon pick up on, but the main idea is to not over commit yourself to spending, and to ensure you have more coming in than going out.
Wages to staff is one of the major costs to any business, and it is your duty to ensure that these are always paid on time. Never stuff around your employees when it comes to their wages. They can easily leave, meaning you are without staff and in a lot of trouble.
Leave bill payments until the date required. Try not to be late with bill payments, but remember that the longer the cash is in your bank, the more interest you will get. If you are always on time, you can start to get the benefits of credit with some suppliers. Never muck around your regular suppliers either.
Create a simple spreadsheet showing all of your incomings and outgoings. Always keep receipts, and document all the relevant information from these in your spreadsheet.
Only use your accountant for tricky things like taxes, and keeping the tax department off your back. They can also come in handy when it comes to setting up your business, and ensuring all of your business and personal accounting is up to scratch. Try to keep them as a last resort though as they can be quite costly.
Run your business accounts manually for a few weeks or months before getting in a piece of fancy software to take care of them for you. By doing this you will have a much better understanding of where your money is going, and what is happening behind the scenes of that software.
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