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By Henry Brown

When you track expenses at your SMB, you have a better understanding of how to reduce costs to keep yourself afloat. Yet without previous experience or hiring an accountant, it can be tricky to maintain accurate records. So here are some small tips for better financial business health.

Don’t forget about in-house tasks

Over 90% of businesses outsource at least one core task. And outsourcing can be a great way to ensure you have certain things done the right way. Additionally, outsourcing is easy to track because you have an agreed expense with a service provider. But do you ever consider insourcing and the benefits of keeping track of it? Time and money are dedicated to in-house tasks such as NDAs. So don’t forget to add up resources such as extra costs for overtime.

Create separate bank accounts

It’s never a good idea to use your personal account for business transactions and vice versa. It’s not illegal. But it can cause a lot of confusion, which means time and money when going through statements for taxes and reports. Fortunately, you can pretty much open as many bank accounts as you need. You can simplify this with a general account for processing customer transactions, one for employee expenses, and another for holding taxes due to be paid.

Track expenses with apps

If you can afford to hire a full-time accountant, then they can be a massive help. But sometimes, they aren’t even necessary. Especially when you consider how easy it is to use apps like Quickbooks. Quickbooks and apps like it can connect to your business bank account, thereby recording all transactions for you. Of course, you can also manually insert records too. Also, financial apps will work out how much tax you owe in the countries where you operate.

Choose a consistent accounting method

There are two main types of accounts you use in business. These are accrual accounting and cash basis accounting. You can use both. But for simplification, easier tax payments, and reduced errors, it is best to choose one method. This is vital if you do your books yourself. It also helps to establish a policy for when to report income to your tax office. Accrual accounting is the most widely used method with three-year reporting. Cash basis is reported in the tax year.

Review income and expenditure often

You can’t make actionable changes to make your finances better if you don’t know where you stand. And the only way you can do this is by reviewing your transactions often. And the more frequent, the better. Looking into your finances means you can spot errors quickly, see where your money is going, and highlight the main areas of income. You can then use this data to improve business tasks on a daily basis and make long-term management and staff decisions.

Summary

There are many benefits for your business if you track expenses. You can begin by assessing insourcing costs, using apps like Quickbooks to help, and reviewing finances regularly.

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Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.