Finance forms an integral part of any business. The idea of starting a business is to generate finance. Not just the idea would suffice the growth of a company, proper financing, and accounting procedures has to be followed. If you are starting a small business, then there are certain things you need to know about small business accounting.

  • Maintain a separate bank account

You should not be mixing both your bank account and the expenses you incur for your business. There are a lot of banks that provide a lot of benefits to the business owners. Small business owners could avail themselves a lot of tax benefits when they opened a bank account with certain banks. Apart from availing, the benefits related to tax, maintaining, a separate bank account, will help track the expenses, you incur for your business. If you encounter any small business accountant Los Angeles, he would suggest you open a separate bank account only.

  • Keep a track of all the expenses

When you run your small business from your home, you need to keep a track of all the expenses you make for your small business. Generally, the small business owners begin from home as they could avail themselves a lot of tax-cutting. There are generally five types of expenses, which the small business owners need to pay extra attention to. Meals and entertainment expense, travel expense, vehicle expenses, gifts receipts, and home office receipts are some of the expenses which take up a huge share, but often go unaccounted for.

  • Difference between bookkeeping and accounting 

Small business owners who are unaware of the financial terms must essentially know the difference between bookkeeping and accounting. Any small business accountant Detroit would be able to guide you better on these aspects. The bookkeeping keeps an account of the everyday expenses you make for your small business. This records every transaction and categorizes them which in turn produce your bank statement.

Accounting is a process that is used to estimate the progress made by a business and makes sense out of the entire data compiled by the bookkeeper. For the initial days, you could go for the software to maintain the record.

These days, cloud-based technologies are rapidly used for bookkeeping. When your business grows, it is suggested to maintain an in-house bookkeeper.

There are other important things to be aware of like ways of collecting cash, import duties, etc. However, these are some of the most important things any small business owner or start up enthusiasts must be aware of.