Tips to Simplify & Optimize Your Small Business's Accounting System
It is crucial to stay on top of your accounting, regardless of what type of small business you own or intend to start. If you fail to do so, your business may experience unnecessary issues and obstacles down the road, resulting in a slowed or even stopped growth rate.
An accounting system is generally established by small business owners who know how crucial it is to their business. Small business owners in Dubai often look to larger businesses for inspiration when developing an accounting system. Small business owners make a great mistake by doing this, which makes accounting more tedious and tiring.
The accounting system of any business should be curated based on the type of business, the number of employees, and the number of people who will be working on the accounts. Big businesses usually have a number of accounts and impeccable accounting software to handle the accounts. Now, how can a small business follow the same accounting system with fewer resources and employees?
Therefore, if small businesses want to streamline their accounting process and turn their accounts into accurate and up-to-date accounts, they should simplify their accounting business.
7 Ways to Simplify and Optimize Your Small Business's Accounting System
- Adopt An Automated Accounting System
For a small business, your best employee is technology. Streamline your accounting process and handle invoices electronically, as well as accept payments through multiple gateways. Every invoice will be automatically created and entered, payment reminders will be sent, and payments will be reconciled.
The Automated Accounting System will do all these tasks for you and will also inform you if any payment is past the due date. It will reduce the possibility of errors and provide you with accurate reports. It is also more feasible as compared to appointing a full-time accountant for your business.
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- Cash Flow Management
It is imperative that you seek ways to improve your cash flow as a business owner. Every business needs cash flow, whether it offers services or sells products. Tracking the cash flow of the business provides you with numerous opportunities, such as increasing the flow of cash and avoiding cash wastage in the firm.
Keeping a constant eye on the cash flow will also allow you to make payments for salary or wages, etc. As such, we recommend recurring billing solutions to ensure on-time payment collection.
- Get Rid of Purchase & Sales Order
There is no need to use POs and SOs unless you have multiple employees requiring authorization. As a small business owner, you generally buy and sell the goods yourself, or have an authorised person do it. Typically, you may charge your customers for delivery, so sales orders are a waste of time.
- Pay Your Bills as You Receive Them
Paying Bills upfront may sound like a waste of bank interest earned, but paying the bills fast comes with a number of benefits. First, it will improve your reputation among your sellers. Second, you can get the benefit of upfront payments and cash discounts. Third, you will be safe from late payment and its penalty.
- Proper System for Managing Expenses
Establish a system for handling employee expenses and compensating them in your organization. A system for recording expenses must be in place, considering the expense's purpose and whether it is reimbursed. You must ensure that you reimburse the expenses incurred on time and without delay so that the staff does not need to approach or remind you about the payment of expenses on a regular basis.Payment of expenses on time will also help you to keep a good image.
- Avoid Paying Personal Expenses from Business Account
Paying personal expenses out of the firm's account will increase the complexity of accounting tasks in the firm. You will have to create a drawing account and enter each and every personal transaction there, this will be more time consuming. So, it's always a better course of action to keep your personal expenses out of the business accounts.
- Timely Tax Management
Small businesses often tend to work solely on the accounts department a few weeks before the tax filing date. The accounts department becomes a stressful place and an absolute nightmare.
Make your business accounting easier by filing your taxes on time. Maintain an accurate record of your expenses before the deadline, and you will be tax-ready. It's easier to avoid penalties if you keep a consistent record of your business expenses. It will also help in filing VAT returns and avoiding penalty fines.
You can keep track of and organise all of the paperwork and records required to file VAT by outsourcing to accounting firms in Dubai. In addition, preparing for tax season may prevent federal tax audits (FTA).
How can CDA cater your accounting needs?
CDA has been providing accounting services to its clients all over UAE for more than a decade with its outstanding team of professionals who have worked with the big4s. CDA has now become one of the leading accounting and auditing firms in UAE due to its personalised and cost-efficient services. Small business owners can approach CDA for professional accounting assistance at feasible rates. Here at CDA, we provide an all-round package of accounting and auditing services, including VAT registration, filing deregistration etc. To know more feel free to contact us.
You can also read : Basics of Bookkeeping for Small Business Owners