Small business: how to optimize your accounting?

The smooth running of a small business depends on a number of factors, and keeping proper accounts is one of them. In a very small business, the manager has to wear many hats. It's hard to combine sales, manual labor, management and administration! Bookkeeping, often considered by business owners to be a daunting task, is sometimes entrusted to a secretary or a partner. But they don't necessarily have the skills to draw up annual accounts or certain tax returns. In such cases, the services of a chartered accountant are required. You don't have to call on an accounting firm to handle all your accounting. It is entirely possible to take on part of the work. In this case, all accounting work must be carried out with the utmost rigor. Let's take a look at how you can optimize your accounting to save time and focus on a more productive activity.

Accounting tasks

In large companies, the accounting function is carried out by a specialized department made up of accountants and chief accountants. In smaller companies, the tasks are less complex, but remain more or less the same. Broadly speaking, they involve :

  • file documents (invoices, receipts, etc.) ;
  • number supplier invoices, bank and cash documents ;
  • enter all documents, either on a spreadsheet, in standby, or directly into accounting software;
  • record income and expenditure in bank and in cash ;
  • perform bank reconciliation.

If the company has employees :

  • prepare pay slips ;
  • file social security returns.

And, at year-end :

  • carry out inventory work ;
  • file tax returns ;
  • closing the annual accounts.

Optimizing your accounting

Good bookkeeping allows you to keep a close eye on the development of your small business, to know its profitability in real time, and therefore to better anticipate future actions. To do this, you need to proceed methodically.

Preparing the work

Never let paperwork pile up. Use pockets and binders. As each item arrives, it should be checked and sorted by type: purchase invoices, sales invoices, expenses, sales slips, account statements, cheque stubs and remittances, etc. Then assign each supplier invoice an order number. Then assign each supplier invoice a serial number.

Set up as many direct debits, LCRs and standing orders as possible: rent, water, electricity, telephone, taxes, utilities, suppliers...

You can speed up data entry by pre-totaling, i.e. adding up the sums corresponding to the same type of entry. For example, make a single entry for all the day's sales.

Using Excel

Excel lets you create simple summary or forecast tables that are accessible to everyone. These are real dashboards, very useful for analyzing the situation at any given moment.

Thanks to the spreadsheet's various columns, you can break down your invoices as you see fit: due date, payment method, check number, type of product sold, VAT amount, etc.

You'll be able to see at a glance what you've earned and what you're going to spend.

Investing in accounting software

If you've already used Excel, you'll need to transfer the entries to a more sophisticated software package. There are many such programs on the market. But make sure you choose the right one. The size of your company and the nature of your business should guide your choice.

No software is perfect. First, take stock of your needs. Some features may not be essential. Opt for simplicity and ease of use.

To minimize data-entry errors, prefer "all-in-one" software. These tools automate entries from invoicing to journal entry, and from journal entry to income statement and balance sheet. Data is centralized, making it easy to pass on to the accountant. Bank statements are retrieved directly from the bank and posted.

Some manufacturers offer a free trial of their software. Take the opportunity to compare them.

Day-to-day bookkeeping

Recording transactions on a day-to-day basis may seem time-consuming, but it will prevent you from becoming overwhelmed at the end of the month or the end of the year. You also run the risk of forgetting certain imperative deadlines, such as the monthly VAT return, for example. Keeping track of your accounts gives you excellent visibility of your business. All the latest information is right in front of you. You know exactly where you stand financially.

The best thing to do is to establish a routine: either at the end of the day, or at the end of the week, systematically devote an hour or two to bookkeeping.

Getting support

It's best to seek the advice of a chartered accountant for all legal, social and tax matters. In fact, the scope of corporate obligations is such that it would be a waste of precious time to read up on them every time there is a change.

Unless the person in charge of bookkeeping has the appropriate diploma, having your annual accounts drawn up by a professional is your guarantee of compliance with tax law.

The same applies to pay slips and all other social matters. In the event of an error, aggrieved employees can take you to court, which would be very prejudicial to you.

Optimizing your bookkeeping means not only using tools that enable maximum automation, but also surrounding yourself with experts in the field.