Managing a company often requires business owners to wear multiple hats in several roles, including customer service rep, marketing manager and accountant. Be prepared for all your roles by reviewing these common accounting challenges for small businesses and how to handle them.

Reporting finances

One of the biggest challenges a business faces is keeping up with the financial disclosures and reporting requirements that the United States Securities and Exchange Commission requires. But doing so ensures you document all your information correctly in case your company is audited.

Managing cash flow

A good way to help manage your business’s cash flow is to stay on top of billing and accounts receivable and regularly review your bills. Pay attention to your recurring monthly expenses to see if there are areas to downsize and cut costs where possible.

Remember to earmark funds for specific expenses to help keep cash flow steady and your small business thriving.

Covering unexpected expenses

A business can seem to be in perfect shape until an unexpected expense or emergency pops up. Setting certain funds aside for emergencies and using existing credit to help cover unexpected expenses can make a difference in your bottom line.

Updating expenses

Along with covering unexpected expenses, updating expenses is just as important. Keep track of receipts and recurring costs. Then claim them as small business deductions, as the IRS does require documentation.

Business deductions will lower your taxable income and give a better understanding of your company’s profits and losses.

Regulating payroll

Another one of the accounting challenges for small businesses to look out for is regulating payroll. Classifying employees, filing taxes correctly, paying employees and tracking employee time off are the tip of the iceberg when regulating payroll.

Analyzing finances

Track your finances by verifying all your business transactions regularly. Review your books at the end of each day with these steps in mind: interpreting, analyzing and advising.

Then ask yourself, “What do those numbers mean? How do we improve them?”

Filing taxes

Filing federal and state taxes can be stressful for business owners. Even though your business structure determines your tax obligations, most businesses must pay income, unemployment and payroll taxes.

In addition, businesses pay estimated quarterly taxes if they expect to owe $1,000 or more when filing. Failing to do this can result in fines and penalties.

Keeping up with policy changes

Tax laws are constantly changing. Stay current to reduce your chances of overpaying, underpaying and more.

Summary

Tackle these accounting challenges for small businesses with confidence by working with a trusted team of knowledgeable accountants, tax specialists and more. Contact Todd Greene, CPA, PLLC, to take your business to the next level.

Plus, continue reading our blogs for more accounting news and tips.