ERP Success - Easier than it Sounds
So you've started a new business eh? or perhaps you're a growing small business? And you have some questions. Like how do I handle my finances? What do I use to track it? How do I account for things? What software should I use? Please help? Well fear not here's what you need to know.
1. Keep it Simple
There are tons of options out there but for the most part. If you're a cash-based business that recognizes revenue right away then something like Wave could help. They are a Toronto based company doing great things. For the most part, they're free, but do charge for payment processing.
If you're into it more flexibility Like customizing your chart of accounts then Zoho Books can do the trick.
Either way. both solutions are great for starters, sole-proprietors. and small business owners. The trick is to ensure you keep it simple from the start. There are lots of software out there which can help you. A good rule of thumb is if it doesn't make sense. or isn't user-intuitive within the first hour. then it's probably not the best fit.
Furthermore. tots of individuals start off with tracking their financials in Excel. While this is a commendable method for your personal finance. It is always good to dabble into the world of standardized business software to get you acquainted with what's required to succeed. This is especially recommended for individuals without a finance background.
2. Keep your Receipts Tight
Way back in the day when I was a tax auditor, clients would hand me their receipts in shoe boxes. Long gone are those days of you having to keep your paper receipts at all Nowadays everything is digitalized from Uber receipts to gas cards.
Your receipt tracking is very important when it comes time for an audit and believe me. You'll probably get audited at some point in time. In conjunction to 1 point, most financial software usually has receipt upload capability, so you can take a pic, scan it, and upload it to your financial software. Where you'll have it ready whenever your name is called for an audit. Wave even has OCR technology whereupon scanning your receipt irk automatically fill out the vendor, date, and amount.
Also, ensure to add the context of your receipt and what the business portion is. Don't be that person that claims your 100% of your personal mortgage as a business expense. Again most financial software has a memo field where you can write down why you went on a 'business dinner'.
Select your tools for your business that allow you to scaled upwards easily and efficiently. What this means is that ensure your choices of software. whether it be your accounting tool or a Billing platform is one that can be scaled easily when you've eventually grown your business in the future. This is far easier than done, but mapping out a Long-term strategy as to how you want to grow should also include your IT infrastructure. This is vastly overlooked when companies plan out their roadmap and are often hastily implemented or corrected well past its due date. Again this is far easier said than done. so please ensure you spend plenty of time doing your research.
- Ensure you have separate business and personal bank accounts.
- If you're doing business in USD, and Live in Canada. third party currency exchange brokers such as Interchange Financial can help you Lower your FX cost.
- Ensure you have a business credit card and a personal credit card. I can't emphasize how easy It is to do the month-end period close. as well as credit card and bank reconciliations when you have your business and personal cards separated
- Create a tax liability bank account, this is an ample process where you can create a new Low fee or free savings account where you can transfer your estimated tax Liability from your business bank account. This will allow you to not only gain interest but enables you the appropriate cash flow to pay your tax bill. You can estimate your tax Liability using many online calculators. Furthermore, if you're an independent, read up on El, and don't forget you'll be paying both the employer and employee portions of CPP
- Ensure yourself with the appropriate business insurances required for your field of work. You'll never know when you'll need this.
- Protect yourself with health and disability benefits by researching different companies out there. Some business credits come with Long-term disability included.
Have a great day!