Expense Report (with pen)
If you have a lot of small-business clients, and those which are just starting out, you probably see time after time that many entrepreneurs really struggle to get their finances in order.
While for some this may only cause delays in getting their annual tax returns done, for others things can get so bad that they end up needing to close their venture or sell it off for a small price.
To help your clients succeed (and get their paperwork to you in a more timely manner!) there are many tips you can pass on to them. Read on for a taste of some things all clients should be aware of when starting out and/or growing their businesses.
Keep Personal and Business Expenses Separate
When it comes to top small-business accounting tips, one of the first major ones that all clients should be told is to keep their personal and business expenses separate. While many entrepreneurs see their venture as a personal endeavor that really isn’t too far removed from their everyday costs, it does need to be treated differently.
It is important to accurately record all accounting transactions for a business, so that all of its income and deductibles can be kept track of properly.
That means, for clients, no more using their business credit card to pay for a music class for their child, and no using their personal card to buy a new printer for their venture. While clients can pay their business back for personal expenditures, and vice versa, not keeping things separate is a sure-fire way to complicate matters quickly and give themselves a headache unnecessarily.
As an entrepreneur of a small setup, your clients will likely already feel that there are too few hours in the day, and that keeping paperwork in order and accounting tasks sorted takes up a large proportion of their time.
By keeping separate bank accounts and credit cards for their business and personal expenses, they’ll save themselves a lot of time, and ensure that they don’t end up paying you a lot more in fees to sort out the mess either.
Use Apps to Save Time and Money
While your clients have you on hand to help them with many aspects of their financial management, they can make life easier for everyone if they utilize software tools on a regular basis. There are many free and low-cost tools on the market that can save both time and money.
app colleague
For example, rather than spending time themselves on keying in and coding every purchase that goes through the business, or paying you or your team to do it for them, clients should take advantage of the handy built-in functions in many of today’s top accounting software.
Xero, QuickBooks and many other programs can be linked up directly to bank accounts and credit card accounts. From there, payments made to, or received from, individuals and businesses can be automatically uploaded, rather than having to be manually entered in from receipts.
As well, once things have been coded initially for each incoming payment or outgoing expense, they can automatically be given the same code for all future transactions. This is a huge time saver.
In addition, remind your clients of the many great free and low-cost apps which are available these days. Expensify, for example, is a program that makes putting expense claims together a breeze, and helps managers to ensure that nothing gets missed out on because of lost receipts or because people forget what different charges were for.
The app links up to a company’s credit and debit cards so that, whenever something is paid for on card (such as a client luncheon or new office stationery), the system goes ahead and adds the related information to an expense report.
If items are paid for with cash, business owners and staff members only need to take a photo of their receipt with the camera on their smartphone, and then sync this with Expensify.
From there, the app will extract the relevant information required from the image, and then upload the corresponding data to the report. This saves time, reduces errors, and gives entrepreneurs a better look at their venture’s budget each day/week/month too.
Another top app worth downloading is Toggl, particularly for businesses which charge for every billable hour. Toggl provides users with an easy way to keep track of the amount of minutes or hours which are spent on projects. It also helps to ensure that ventures maximize revenue, by never missing out on charging for time that has been worked.
The time-tracking software is simple to use. With the click of a button, Toggl will start noting when tasks or meetings begin and end. Users, handily, don’t need to have the internet available to them for Toggl to work either.
If people are out and about when completing work (such as at a coffee shop, at home, or at a client’s premises), the app simply keeps tracking the time spent, and then syncs this information once the internet is available again.
Jennifer French is a content coordinator who assists in contributing quality articles on a variety of financial and business articles.