How to Manage Your Accounts if You’re Self-Employed, a Small Business, or a Start-Up
Effective management and excellent service aren’t enough. Your business also needs proper accounting.
When done right, your accounting helps manage your income and expenses (to save costs), makes preparing your tax returns so much easier, and helps you manage your cash flow so your business runs as it should. And once you understand the financial health of your business, you’ll be able to easily forecast revenue and make better decisions for the future.
But how do you manage your accounts and do your accounting if you’re a small business or self-employed person? Let’s take a look.
The Old Way to Manage Accounts for Startups, Small Businesses, and Self-Employed Professionals
The traditional way to do your business’s accounting is likely the way you’ve been taught to do it (or are currently busy developing a headache over).
Step 1: Setting up a System to Manage Your Accounts
Proper accounting relies on recording every single transaction you perform. It’s the only way to ensure you get an accurate picture of your business’s finances. So, the first step in doing your business’s accounting is setting up a system for you to record your financial transactions.
Here you have several options; you can do it manually using a spreadsheet or a physical ledger. You also have the option of using accounting software.
No matter what method you choose, it should enable you to record your financial transactions accurately and align with your business’s workflow and processes.
Step 2: Record Your Transactions
Once you have a system, start recording your business’s financial transactions. Every time you sell a product, you’ll record it. Likewise, whenever you spend money on something for your business, whether for wages or stock, you’ll record it.
You’ll do this for all transactions.
In addition to this, you’ll also keep track of all your assets and liabilities.
Step 3: Financial Statements
You’ll typically do your business’s accounting in clearly defined accounting periods. While this could be anything from months or quarters, small businesses and self-employed individuals often prefer to do it yearly.
At the end of every accounting period, you’ll prepare financial statements, including an income statement, which shows your revenue and expenses, and a balance sheet, which shows your assets, liabilities, and equity.
These statements help you identify trends in your business, budget and plan better, and make better decisions regarding your business. (Plus, they help the tax man decide how much you owe.)
Unfortunately, financial statements are easily the hardest part of managing your accounts if you’re a small business, startup, or self-employed. Because there are so many nuances in accounting, you might find yourself worrying over items and columns rather than running your business.
Step 4: Record-Keeping for Small Businesses, Startups, and Self-Employed Professionals
While working through the steps above, it’s critical that you keep records of all your business’s financial transactions. As such, you should keep all your receipts, invoices, and any other relevant documentation.
You should also ensure that your financial statements are accurate and complete with source documentation.
This is because you’ll use this information when preparing your tax returns, so when done right, you’ll have one less thing to worry about. And speaking of tax, you could also consider hiring an accountant or tax professional to ensure your tax affairs are in order.
The New Way to Manage Accounts if You Are Self-Employed, Small Business, or a Startup
Now that you’ve seen the traditional way of doing your business’s accounting, you’ve probably also seen the challenge. Every minute you spend on recording transactions and gathering documents is a minute you don’t spend on running your business.
This is where Outmin comes in. It’s a digital, all-in-one solution designed to cater to small businesses’ needs. Our platform removes the burden of bookkeeping from you and, in doing so, eliminates stress, increases compliance, and provides you with real-time insights into your business’s finances.
But how does it work?
It’s pretty simple. You give Outmin access to your data, or you upload your documents by dragging and dropping from your desktop or using the app. You also pay a small monthly subscription. That’s it!
Once you’ve done this, you leave the rest to Outmin, and you get:
Ultimately, Outmin provides everything you need to keep your accounting in check.
If your business has more advanced accounting needs, Outmin offers more support and can help you with account management, supplier payments, and regular check-in calls.
Apart from this, Outmin also offers fractional CFO and Financial Controller services, strategic guidance, board reporting assistance, and more, for those businesses with complex financial requirements.
Instead of developing a headache over your financial statements and the daily record-keeping, Outmin brings a wealth of benefits to your business:
Is traditional accounting really the way forward for you? Calculate just how much time you’ll have to spend away from your business. After all, there is a better way. Once you let Outmin take care of all your accounting, you’ll finally be able to focus on where you’re most needed: the future of your business.