Tipsfor Better Accounting in Your SME

There are no worse horror stories for an entrepreneur than those that are usually seen in all parts of the world after annual fiscal closures. Closure, fines, losses and all kinds of administrative nightmares are a trend in businesses where you just needed a little advice, so today we want to share some tips for better accounting in your SME.

The issue of taxes is one of the headaches of many SMEs, but at the same time is one of the most important both to avoid penalties and to know the financial status of the company.

Good fiscal practice can translate into savings because it allows you to analyse which elements are consuming the most resources and with that recalculate information that is most convenient for the following fiscal cycles.

Here are some effective and low-cost solutions that will keep your business away from problems.

Leave your accounting in the hands of experts

When you start a business you usually ignore the administrative department, perhaps following the myth that it is somewhat costly with respect to the benefits it represents. It is a trap! Never believe that such investment will be a waste: it is always better to leave the accounting in the hands of specialists. There are several options that can adapt to the needs of your company:

  • External help for small companies where invoices and documentation can be carried out with a certain
  • Subcontract a person to do these tasks when necessary.
  • Hire a person dedicated to the accounting department, the most convenient and convenient option to which all SMEs should aim.

There is no need for this person to be a specialist, but they do need to know the needs of a company, at least in its everyday aspects. In case of any doubt, you can always seek external advice from, for example, accountants in central London for more complex issues.

Keep in mind that legislation and regulations change constantly, so it is important to make sure that regardless of the option you choose your accounts are up to date and in-line with all the adjustments.

Technology is your best ally

The days of keeping accounts with pencil and paper have been left behind, and like everything in these modern times, repetitive processes are always better done automatically. The first characteristic to take into account when choosing an accounting program is the interface and management. Remember that the software is only a tool for the accounting team, not the base of the department, so if its use is difficult and tedious it will simply be creating a problem.

On the other hand, it is vital to take into account its integration with other areas of the company such as purchasing, inventory, etc. There are many options, from the most basic and free, through to the most specialised incorporating national/regional accounting and tax regulations.

Planning accounting in SMEs

It may sound very trite, buttime is definitely money. Leaving the calculation of taxes to the last minute always means ignoring tax deductions, and if there is something frustrating it is finding a tax deduction too late.

On the other hand, fiscal indiscipline means outright that there are no rebates. It is not about acting illegally or paying fewer taxes, it is about knowing how we can act to take advantage of the tax benefits offered by the law and to be competitive without being burdened by tax commitments.

Do not leave anything out

The first step to an effective accounting strategy is to know the state of the company. Check the old books, also update and centralise all the data you have that can be in different places like old folders and/or Excel sheets on local computers. The consolidation of this data will allow you to establish the best strategy for the benefit of the company.

Discover your advantages

Also investigate the incentives offered by the legal framework: discounts for early payment, volume, donations, among others. Keep in mind that all this will be in vain if you do not maintain a strict fiscal discipline. Count your expenses rigidly and do not include the income until it hasmaterialised.

Avoid these common errors

There are a number of very common mistakes that you must avoid at all costs, such as not eliminating assets that will not appear as outstanding accounts with delinquent customers or property acquired that has depreciated. One of the most recurrent errors is also the inadequate valuation of inventory, which is why it is necessary to include the unfinished or pending products to be delivered.

Hopefully, these accounting tips for your SME will be useful and you can make this a less tedious priority in your company.

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