An owner of an equine business already has a very busy schedule, so it's simple to overlook bookkeeping. There are some actions you can take right away that are simple and can position your business for success, whether you handle the books yourself or hire someone. Here are some crucial equine business accounting pointers to keep your books in order at all times:
1. MAINTAIN SEPARATION OF YOUR PERSONAL AND BUSINESS FINANCES
Don't just empty your personal account of your earnings and other funds. Instead, completely segregate your personal and business finances. This might be required depending on the legal structure of your company, but even if it's not, having a separate business account makes it much simpler to manage the finances of the company.
Spending time going through every transaction in search of a specific piece of business you did is the last thing you want to have to do. Open a separate bank account just for your business to make banking hassle-free. Additionally, this will make tax season much simpler for you. You can be a lot more organized if you have a different account. Your business finances remain in your business account, while your personal finances remain in your personal account.
2. ENSURE THAT YOUR RECORDS ARE ORGANIZED AND CLEAN.
While some people can work in a cluttered environment, others need their documents to be neat and organized in order to function. The books for your business should be kept as organized as possible, even though this may work in your personal life. This will save you time when your accounts are disorganized and you need to search for something. Your costs will be lower if you hire an accountant or bookkeeper if you have everything organized because you won't be paying them to look for receipts and invoices.
Accounting software for small businesses makes it easier to maintain organized records. As a result, you can spend less time looking for things and more time managing your equine business. You will be glad you took the time to make sure your records are organized when tax deadlines are approaching.
3. BE AWARE OF AND COMPLY WITH TAX DEADLINES
Do whatever it takes to keep track of approaching tax deadlines. Whatever helps you, set phone reminders or calendar entries for them. A looming tax deadline can be stressful, especially if you're rushing because you forgot it was approaching. Any errors you make can take more time to correct, and cash flow can be more difficult to forecast when you're unsure of your tax liabilities.
Tax payment doesn't have to be a scary experience. Make a note of the tax filing deadline, set a reminder in advance, and the rest will be easy. This will give you plenty of time to complete your tax return accurately. You can write it down, put it away, and forget about it until the next deadline because the taxman won't be looking into it.
4. RETAIN EVERY RECEIPT.
Keep all receipts from purchases made for your business so you can claim any expenses and, if applicable, reclaim VAT.
Your business will determine what you can claim, but an accountant should be able to guide you in making that decision. Expenses can include anything from horse feed to advertising costs. Any expenses incurred for your business should be saved and entered into the organized records you have created.
If you decide to use accounting software, many of them come with integrated receipt management tools that let you take a photo and scan a receipt with your phone before uploading it to your accounting software.
In addition to making it simpler to keep track of expenses than tossing paper receipts in a shoebox, this also makes it simple to locate an old receipt in the event that you need to reorder an item or make a warranty claim from the manufacturer.