Poor business accounting services can really hurt your company’s bottom-line. So what is that you can do as a business owner to make sure this doesn’t happen?
there are many reasons why poor business accounting services hurt company profits. If you follow the 5 best business accounting practices below, your company will be on the right track:
1. Keep accurate records, says Oakville Business Accountant
Accurate record keeping is the cornerstone of your company’s financial strength. All of your company’s financial data (accounts receivable, payables, inventory, net income, etc.) can be rendered useless if your record keeping is shoddy.
Keeping accurate records starts with having a good accounting software package, such as QuickBooks or Simply Accounting, and having a competent provider of business accounting services in Oakville.
Having your business accounting services provider in Oakville record all expense receipts, inventory purchases, payables, sales records, and receivables on a weekly basis will certainly result in accurate financial reporting. This will provide you with the information you need to make important management decisions.
For additional reading on how to select the right accounting program, please see Chartered Accountant Oakville – Best Accounting Practices
2. Review your financial statements regularly
You should review your company’s financial statements with your accountant regularly (i.e. at least quarterly).
When conducting a review of your financial statements, keep an eye out for the following:
- Changes in gross margin. This could be s result of lower prices, discounts or higher costs for inventory.
- Change in revenue. If total revenues did not meet your expectations, you should revisit your business plan and determine what improvements need to be made.
- Change in costs. Keeping costs under control is essential to maintain strong profits. You may need to renegotiate with your suppliers for lower rates.
If you’re not currently doing this, you should speak with your provider of business accounting services in Oakville.
3. Earn interest on surplus cash
Most financial institutions will offer high interest rate savings accounts to business owners. Excess cash (i.e. cash that is not required for working capital) should be transferred to a high interest savings account.
Your provider of business accounting services in Oakville can recommend banks that offer high interest savings accounts.
4. Send customer invoices on time
The sales process doesn’t end with the sale of a product or service. You must make sure you collect the amount owing from your customer.
Therefore, make sure that you send your customer invoices on time. By doing so, you’ll notice a positive change in your cash flow and accounts receivable.
As a provider of business accounting services in Oakville, I follow this very same practice for my firm.
5. Don’t lose your receipts
I often hear from clients that “I don’t require any receipts, since I have my bank and credit card statements.”
Bank and credit card statements only provide proof of payment, but don’t provide sufficient details for the purchase. In fact, the Canada Revenue Agency, in an audit, requires the original receipt as proof of purchase, and won’t accept bank or credit card statements as a substitute.
Finally, by keeping all of your receipts you can recover the GST paid when you prepare your company’s GST return.
For more information, you should speak with your provider of business accounting services in Oakville.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.