Financial Record Tips Every SME Must Know

A very essential part of starting a business ismanaging your finances. Otherwise known as book-keeping, financial records is a very critical aspect of sound business management practice. Keeping tracks of your books can be tedious especially for entrepreneurs without backgrounds in finances.

For some, as long as expenditures are reasonable and do not overshadow the income, they naturally assume they’re doing fine. One should not however forget the potentials of having the business boom to a stagewhere investors will be needed or probably computing taxation.

Outsourcing to a professional like an accountant would obviouslycome with its own feesand every starting entrepreneur wants to minimize costs as effective as possible.

The following are some basic tips that can help you get by;

1. Learning basic terms should be your first task. This will serve as a foundation for you. Terms like cash accounts, ledger accounts, accrual accounting, balance sheet, cash flow, credit, debits etc. Once you familiarize yourself with these terms and they no longer appear strange to you, then you will find other basic accounting practices easier to deal with.

2. The next thing you want to do isset up a financial period for yourself. You need to be able to assess yourself per time to be able to know how you stand and also to plan. It goes without saying that if you don’t know where you are, you may not understand how far you have come, talk more of where you should be heading.

3. The easiest of them all is try theshoe-box approach. This method entails you keeping virtually every piece of paper in forms of receipts, bank statements and all forms of proofs of financial transactions. At the end of a month, you will be able to compile them, then you can make use of regular software like Microsoft Excel to tabulate your finances within the window you have set for yourself.

4. Theuse of software and applications for day to day activities is fast becoming default rather than an option. So that is an areayou would definitely want to invest in. Take out your time to search for software or applications that will suit your needs and easy to use. They are so many and you won’t have to have a headache in choosing as long as you visit the review sections, comments sections and most likely the rate of downloads. You can also get referrals from other entrepreneurs who were once in your shoes.

5. Also, in contacting entrepreneurs who once started like you, you should ask forvaluable advice on how to deal with your accounting matters too. Not also forgetting that there are a lot of financial websites that offer limited free bookkeeping servicesyou might want to take advantage of.

• Adapted from Nairametrics article

The post Financial Record Tips Every SME Must Know appeared first on SME Digest!.