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Small business accounting may seem unimportant or even a drudgery to the small business owner who is driven to grow his/her business. But know this—poor accounting and financial management are primary reasons for small business failures. So, it is important to make good small business accounting a priority so you can focus on growing your business with confidence. 

The Importance of Small Business Accounting 

Good small business accounting is vital to running a business because it is the very means of tracking income and expenses, determining profitability, ensuring statutory compliance, and providing management and investors with reliable financial information to make good business decisions. It provides a clear picture of the financial position of the business, helps to create budgets and future projections, is critical in having good relationships with banks and other financial institutions, and helps to detect and avoid fraud and theft by customers, employees, and suppliers. 

Small Business Accounting Tips 

Use these tips to get your small business accounting on track: 

• Keep business and personal expenses separate. That requires a small business owner to open a business bank account and a business credit card, account and then keep all transactions totally separated.  

• Carefully track all expenses. That includes labeling and categorizing expenses and creating a way to keep expense records organized.    

• Accurately record all income and carefully monitor cash flow.  

• Have an effective bookkeeping system. That should include using accounting software to automate accounting practices.  

• Have an effective payroll system and keep careful tabs on all labor costs, including insurance and governmental withholdings.   

• Maintain detailed inventory records.  

• Follow up promptly on all invoices and receivables.  

• Get professional accounting and tax assistance.  

• Regularly and consistently review the books and financial statements.  

• Expect and prepare for unexpected expenses.  

• Create financial projections for future periods.  

• Seek funding to provide needed capital to operate and grow.   

Seek Experienced Financial Assistance 

Contact Lode Capital for financing made easy. We offer customized financing options that are critical to your success.