by Debi Enders
The new year is a great time to form new habits. For ideas, we’ve identified three practices that distinguish many successful small-business accounting departments.
Account for payroll, sales and other taxes immediately. Some small businesses pay their employees on schedule but fail to account for payroll taxes at the same time. They take a “we’ll worry about that later” approach. In addition to opening the doors to accounting errors and missed payments, this approach can limit a small business’s ability to obtain financing. Many lenders opt out of lending money to businesses that fall behind on tax payments. You can avoid these pitfalls by accounting for taxes as you incur them – and paying them on time.
Download your bank records every day. In this electronic day and age, there’s no reason to wait for end-of-month statements to understand your company’s cash flow or check for fraudulent activity. Today’s accounting software makes it easy to download bank records daily, while they’re still fresh. Daily checks also benefit your business in the long run, providing the real-time information managers need for good decision making.
Use purchasing cards, especially for small transactions. It can take substantial time and effort to process invoices and reimburse employees for small purchases they make on your company’s behalf. Your accounts payable staff will work more efficiently if you assign purchasing cards to key employees and then reimburse them for their purchases monthly. Accounting controls – from spending limits to software monitoring – help mitigate the risk of misuse.
The bottom line: Time- and money-saving accounting practices help an accounting department succeed. Make 2015 the year you resolve to follow them.
Debi Enders (debi.enders@commercebank.com) is assistant vice president, small business banking at Commerce Bank.
Submitted 9 years 120 days ago