7 Tips for Managing Your Small Business Accounting Organized

7 Tips for Managing Your Small Business Accounting Organized

Accounting is essential in businesses of all sizes. Still, it often falls to the bottom of the priority list for small business owners, as they juggle all of the other duties associated with handling and sustaining day-to-day operations. 

Maintaining balanced books enables you to predict financial performance months in advance and alerts you to possible financial gaps. Accounting insight can even allow you to save your company if times get tough.

 Table of content:

1. Keep Personal and Business Accounts distinct.

2. Evaluate Your Finances Regularly

3. Consider Hiring a Professional

4. Plan for Major Expenses

5. Use Accounting Software.

6. Keep thorough records

7. Track business expenses


Accounting is often pushed to the back burner for small businesses due to its cumbersome and daunting nature. 40% of small business owners believe that the most challenging aspect of running a business is financial management. 

When accounting errors arise, they can stop the small business’s growth and place it on shaky ground.

As a business owner, you are accountable for maintaining accurate financial records. If your accounting reports are current and correct, your business will be successful. 

However, if you fail to prioritize your accounting tasks, your business will rapidly sink without the opportunity to expand.

To ensure your accounting is perfect from the moment your business is born, use these seven tips for your small business.

1. Keep Personal and Business Accounts distinct.

For the first few months, many small business owners depend on personal funds to keep the business afloat. Although there is nothing naturally wrong with using private funds for business purposes, using your bank account for business purposes can be problematic.

Having a separate business bank account enables you and your accountant or bookkeeper to monitor how money spends quickly. If you use your account for business transactions, you can miss critical business transactions.

When you move forward, ensure that your company and personal finances are adequately segregated. This could require the establishment of different credit cards and checking accounts for each. 

Spend with extreme caution, ensuring that company accounts are used only for business-related expenses. Likewise, your account is subject to the same restrictions.

Cash payments are easy to overlook; many business owners fail to keep track of their receipts. Cash payments that are not made on time will result in inaccurate cash flow management reports and poor forecasting.

2. Evaluate Your Finances Regularly

The easiest way to stay on top of your bookkeeping is to adhere to a rigid schedule and conduct a thorough analysis of your business’s financials at least every other week. 

Twice a month, set aside approximately one to two hours to review the business’s deposits, withdrawals, transfers, sales, and other significant transactions.

Even if you have invested in reputable software to assist you in managing your accounts, the software still needs human involvement and is susceptible to human error. 

Although checking your books is not an exciting process, the peace of mind that comes with reliable records cannot overstate.

Taking the time to review also provides an excellent opportunity to audit the accounts receivable to confirm that your clients pay their bills on time and schedule. 

If you find any irregularities or non-payments, you may exert some gentle pressure to get your books up to date in time for tax season.

3. Consider Hiring a Professional

If you don’t have time to review your finances regularly due to your hectic schedule, it might be time to consider hiring a part-time accountant.

Only a few hours per week or month with a competent bookkeeper or accountant will make a significant difference. 

At the same time, the functions of a bookkeeper and accountant overlap, a bookkeeper’s primary responsibility is to document and classify income and expenses. 

Additionally, an accountant can assist you with tax preparation and strategic planning.

A professional will keep your records current and organized, and a professional will be more knowledgeable about future fees, loopholes, and additional tax deductions for which you can qualify.

Understanding various IRS provisions and conditions will assist you in obtaining tax benefits and saving time.

4. Plan for Major Expenses

If you neglect to budget for significant expenditures, you almost definitely will come to regret it. This is very true if you work in a highly competitive market and cannot capitalize on a golden opportunity simply because you lack sufficient resources.

Saving money necessitates a cautious approach to the business’s day-to-day operations. Maintain a healthy rainy-day fund for potential expenditures such as updated equipment or an upgrade to the business’s computer systems by saving in small amounts over a planned period.

Compile all expenses, including payroll and other administrative costs. Once you are assured that you have a reliable figure, you must calculate how much money your business would need to generate per month to stay viable, including annual insurance expenses. 

From there, you can deduct average costs and create a reliable and appropriate savings plan.

5. Use Accounting Software.

It’s a well-known fact that automation will save small business owners their lives. 

The more automated processes you implement, the more time you’ll have to devote to your business.

Consider automating the accounting functions using accounting software to simplify the accounting obligations. You may bid farewell to spreadsheets and manual number crunching with apps.

Consider factors such as storage, usability, and security when comparing accounting software. Create a list of the features, pricing, and reports that are a must-have for your business.

 Accounting software was once prohibitively expensive for many small businesses, but now comprehensive accounting software is available for a monthly charge. 

Accounting software is becoming more user-friendly and offers many features and services to small business owners, including revenue monitoring, financial planning, inventory management, balance sheets, payroll, and taxes.

By automating processes and reliably monitoring and reconciling the books, cloud-based accounting software also integrates with various other business software programs. 

Data sharing between applications will help you avoid mistakes and save you time by eliminating the need to enter data into your accounting software manually.

6. Keep thorough records

Organizing and maintaining accounting records for your business, such as invoices, receipts, and expenses, can make or break your financial statements. 

Failure to maintain correct records may have a detrimental effect on your business’s financial situation.

If you’re a paper record keeper, keep them in a secure and secure place. Additionally, ensure that you maintain an orderly filing system for your paper accounting documents using various labels and sorting strategies.

If you’re not a supporter of paper records, you can always opt for electronics. Maintain paperless backups of your accounting data on your computers or in the cloud.

7. Track business expenses

Certain expenses can be challenging to budget for. Although some costs are predictable, others are not. However, if you plan and anticipate the inevitable, you will find that your company will do much better in the long run.

Keep a complete list of all your expenses, including equipment, inventory, insurance, and services, when it comes to your books. 

Additionally, develop a strategy for dealing with unanticipated costs. This way, you can more accurately forecast significant future cost and avoid being disappointed.


Accounting is the basis of every business, so these small business accounting tips and tricks are critical for success. 

Contact an accountant if you do not already have one and inquire about the best place to begin! Alternatively, it would help if you experimented with accounting software such as QuickBooks, which automates small business accounting. 

By following these accounting tips for startups and large businesses, you will ensure that your business remains financially sound for the foreseeable future.