By Roy Fisher, CPA

Small business owners the world over are constantly searching for the secret to success. Unfortunately, the only way to become truly successful is to put in a lot of hard work, demonstrate a great deal of patience, and ensure you have a bucket load of perseverance at all times. So, although theres no get-rich-quick formula to follow, these five tips will set the groundwork for attaining new heights in your business.

Computerize

Gone is the era of handing over a couple of shoeboxes full of receipts to your accountant at the end of the tax year. These days its an absolute must for business owners to know their businesss financial position (in terms of taxation, cash flow and profitability) throughout the year.

For those of you who arent the most computer-savvy, or if your heart immediately picks up the pace when thinking about taxes and numbers, the easy solution is a computerized accounting system.

These days, you have a lot of options. The good news is that most of these packages operate on the same basic principles, with perhaps a few unique aspects to differentiate them. If you already have a good accountant on board, ask them which packages they work with most often, and whether they prefer any one program over another. It makes sense to be working in a format that is compatible with your accountant.

The majority of accounting software packages are fairly simple to operate after a little training. Remember that the quality of the information you get out of your software can only ever be as good as the quality of information you inputif this means you need to hire a bookkeeper or train up your existing staff, rest assured that it will be money well spent.

Keep business and personal matters separate

When you run your own business it can sometimes be hard to keep personal matters personal. This separation is an absolute must if you want to maintain credibility and an appearance of professionalism, not to mention to save yourself many headaches down the road.

Even if your situation doesnt call for separate bank accounts as a legal requirement, I cant see any scenario where its not beneficial. Not only can you easily keep track of cash flow in your business, you can easily perform regular bank reconciliations and be confident that you havent omitted expenses or overlooked a payment or two.

A good idea to increase security when it comes to business bank accounts is to set up the account as requiring at least two signatures on checks. Although fraud is still a possibility, the chances of escaping unnoticed for any period of time are greatly diminished.

Budget, budget, budget

Some people can get by in their personal lives without ever creating or sticking to a budgetI dont recommend it, but it has been done. When it comes to a business however, Im pretty sure youll find that the only businesses who dont work with a budget are the ones that fail.

To be successful in business you absolutely must be mindful of your spending, ensuring it is always planned and based on a sound budget. If some unforeseen event occurs you can easily review your records to see which expenses can be cut back to get you through.

Maintain accurate records

If you dont keep an accurate record of all that has transpired in your business, you run the risk of missing out on deductions that you are entitled to. Not only that, the financial impact could potentially be magnified if you are penalized with fines or interest payments as a result of disallowed claims or overlooked obligations. If you find that you are struggling to keep on top of things, a bookkeeper or administration assistant can be well worth the cost.

Outsource payroll

Not only can outsourcing payroll save you a tremendous amount of time and hassle, but it can lessen your legal liability. Calculating federal, state, and local employment taxes is potentially an easy area to make errors. By outsourcing, the risk associated with such calculations is transferred to the provider who is an expert in the field.

Whether youre preparing to establish a new small business, or if youve been operating for some time, these handy tips will help you in your quest for success.

About the Author: Roy Fisher, CPA specializes in providing accounting and tax services to small business owners and professional practices in Houston, TX. For more information, go here:

ledger-solutions.com

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