Warren Buffett once said “accounting is the language of business” however, if you’re a young entrepreneur, despite your business goals, the word ‘accounting’ may strike fear into your heart. Bookkeeping, credits and debits, payslips and BAS – all of these terms can be overwhelming especially when there’s not a lot of room for error. However, don’t fret! AFY is here to help with some handy tips for 21st century entrepreneurs that will immediately alleviate stress and get you started on the right foot.
Keep Your Receipts!
This tip couldn’t be more easy, especially now that there are a multitude of apps for Apple and Android available, that make it easy to scan receipts and send them to yourself. Why should you do it? Keeping track of receipts (plus invoices and bills for that matter) makes it easier to track your business’s spending as a whole. You’re less likely to blow your budget if you are financially aware of how much you’re spending. Tracking business expenses further means you’re more likely to put your hand up for eligible tax deductions. The more tax deductions you make, the less income tax you’ll pay.
Learn the Language
Feeling overwhelmed with all the financial terms you don’t understand? Like a tourist in a foreign country, start learning the words and phrases (especially at the start of the month) so that by the end of the month you’re not stressed out with homework. Words like general ledger, cash flow, and equity are all words any modern entrepreneur should know. Not sure where to start? The Australian Accounting Standards Board has a glossary of defined terms – which goes over the A to Z of accounting. Otherwise, find a friend or get referred to an accountant who you can ask for advice.
Use Accounting Software
One of the best investments an entrepreneur can make, accounting software is now often essential for the modern businesses. Choose one that fits your company and your needs. Do you have employees with payroll requirements? Do you need mobile software (like most entrepreneurs) or are you fine with a desktop application? Does the system need to handle foreign currency? These are all questions you should ask and research before buying from the softwares available.
Ask for Good Advice
At the end of the day you’ve got a business to run – so you can’t be spending all your time solving accounting questions. This means you have to reach out to friends, other young entrepreneurs and even an accountant occasionally for those hard to answer questions that require an opinion. An Australian website like Flying Solo is helpful. Alternatively, AFY can provide excellent advice on all manner of issues including budgeting, setting up accounting software, tax and online bill payments.