In the business world, accounting plays the role of a lifeline that stabilizes a business financially by keeping a track of all the expenses made and profits earned. Today’s professional crowd has got a mind that craves for start-ups irrespective of industry and business domain. The advancement of technology has helped every business owner to infuse technology with their respective business domain. While going through the business establishment process, it is to be noted that every single business transaction needs to be tracked down. By being a business owner, you might end up in core-planning tasks and maintaining multiple scenarios. In such a hectic schedule, planning for the accounting records becomes crucial. Since it is a mandatory task, and can’t be avoided, here are a few tasks that will help your start-up to maintain the expense accordingly.
1. Maintain Accurate Records
Be it one dirham or millions, every transaction must be sketched down immediately when it takes place. Ideally, every business entity must follow the rule of double accounting, which includes the credit and debit side that needs to be maintained. Make sure that your accounting and bookkeeping transactions are recorded on time and are accurate.
2. Get a Corporate Bank Account
Another critical step that needs to be initiated is to open a corporate bank account for the business. This helps you to keep a proper check and balance between the personal and professional finances and would avoid any kind of confusion. Maintaining a bank account for your business helps to ease the transactions while dealing with your creditors and debtors.
3. Maintain Receipts/ Bills
As you are at the initial phase of setting up your business and you may be incurring lot of expenses, it turns out to be utmost important to maintain the receipts/bills properly. Many at times, you might tend to pay and forget to maintain a count. This will be substituted accordingly if you keep the receipts appropriately. Moreover, it will give you a clear idea regarding the necessary and unwanted expenses, which can be reduced accordingly over a period of time.
4. Invoice Accurately
The invoice needs to be done accurately while dealing with your customers. Make sure you keep a copy of the transaction made, which will help you to strengthen your accounting records. Maintaining the invoices properly will help you to avoid any kind of confusion in the long run.
5. Create a Profit & Loss Statement
In accounting, the profit and loss statement is a report which will show the expense incurred and income earned. The core task of the account is to summarize the revenues earned and expenses occurred during a specific time. On a later date, it will help you to compare and analyse accordingly.
6. Record Each Payment Mode
In today’s digital world, there exist multiple payment options. These platforms are different from those of the offline mode. It is essential for an accountant to have a clear understanding of the method of payment used while receiving and paying money. Each record needs to be recorded along with the mode of payment used during the business transaction.
7. Collect Taxes at the Time of Sale
The introduction of the VAT has made a compulsion to pay a certain amount as a consumable tax. While dealing with your customers, make sure that the VAT gets collected accordingly at the time of the sale, and is recorded accordingly, to avoid any hindrance in the Tax Filing process at a later date.
You can see that at the starting phase of a business, every dot is to be taken care of. Be it a small or a significant expense made, or profits earned every single transaction needs to be recorded. On the flip side, it is to be noted that core planning also serves to be an essential step when it comes to a start-up. Any action taken needs to be backed by a reason and solid planning.
Therefore, it is recommended that business owners stay-focused towards the planning and strategy building by hiring an accountant at the same time. Your decision will not only help you in maintaining your records but will help you to channelize your book of records from the initial point, which will avoid any kind of error during expansion. At JAXA, our accounting experts take care of your company’s accounting needs and cater them accordingly. To have a word with our experts, do contact us-we’d be glad to assist.