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Owning a small business is tough. Read on to learn about some accounting challenges small operations can face — and how to address them. [[{“value”:”
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Running a small business isn’t easy. After all, you’re in charge of a lot of moving parts, and you may find that you’re in over your head when it comes to the money side of things. With that in mind, here are a few accounting challenges your business might face — and how to manage them.
1. Tax compliance
As a small business, the rules of paying taxes and reporting income may be different than they are for individual employees who work for themselves. To some degree, the way your business is structured might impact your tax obligations. But because small business taxes can be a complex topic, this is one area you definitely shouldn’t hesitate to get help in.
It’s a good idea to engage the services of an accounting professional or firm who can handle all tax-related matters for your company. An accountant can file your small business tax returns, set up estimated tax payments your company is required to make, and make sure you’re submitting the right reports as per your state’s specific requirements.
Of course, there are also certain tax deductions you may be eligible for as a small business owner. An accountant can help make certain you’re able to maximize those, too.
2. Managing payroll
Paying the people you employ may be a more complex process than simply writing monthly checks. There are taxes you need to pay and withhold and processes you need to follow, such as making sure you’re classifying different employees correctly.
The right payroll software could make your life easier. And if you have a smaller team, you may be able to manage payroll on your own with the help of the right program.
But if you have a larger staff, you may want to consider hiring a payroll administrator. That person may also be able to double as your company’s benefits coordinator, depending on the circumstances involved.
3. Ensuring adequate cash flow
Just as any individual could run into a string of unplanned expenses, so too could your business. You might land in a situation where you suddenly have to replace a bunch of equipment without warning, or you have to shell out money to cover an increase in rent. Throw in the fact that your company’s revenue might fluctuate from month to month, and you’ve got a tough ask on your hands.
One thing it pays to do is find accounting software that helps you manage your cash flow. At the same time, though, aim to build a small business emergency fund similar to the emergency fund you hopefully have for personal hiccups.
You may also want to hire an experienced in-house bookkeeper to manage your company’s financial accounts. If you have a small operation, you may be equipped to do this alone with the help of the right software. But if your role as a business owner has you running around a lot and leaves you little time for administrative work, then this is one important task it could pay to hire someone for.
One of the savviest moves you can make as a small business owner is seeking help when you realize you’re in over your head. So if any of these challenges seem like too much for you to handle on your own, don’t hesitate to find experts who can tackle them with relative ease.
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