As a fashion business owner, there’s no doubt that you’ve got a hundred and one different things going on at any given moment. Whether it’s managing inventory, hiring and firing employees, going to fashion shows, or running the day-to-day operations of the business, you’ve got a lot on your plate.
One of the most difficult tasks you probably have is keeping track of all the different business expenses that you have on your plate. In this article, we’ll teach you how to keep track of business expenses for your fashion business.
Separate Personal and Business Bank Accounts
The most important step in tracking your business expenses is to open a dedicated business bank account. Many new business owners start out using their own personal bank account for all business-related income and expenditures.
That, however, is a surefire recipe for getting personal and business transactions muddled up. And more confusion is the last thing you need when you start your accounting journey. Not to mention, it’ll make things all the more difficult if your business’s financial transactions ever get audited. So the best is to get a Chartered accountants services.
A chartered accountant can offer specialist accountancy services and business advice in a range of important areas. The key difference between an accountant and a chartered accountant is that the latter is typically more highly qualified and experienced, and will be a member of a professional body.
So take the plunge and open a business bank account. An added plus is that many business bank accounts will come with features that make handling business transactions much easier, such as advanced mobile banking and built-in tax documentation.
Choose Cash Basis or Accrual Basis Accounting
The next step as you start to track your business expenses is to choose whether you’re going to do a cash basis or accrual basis accounting. Cash basis account is far simpler than accrual basis.
When you do the cash basis accounting system, you record transactions when they happen (i.e. when the money is transferred in or out of your bank account). When you do the accrual basis accounting system, you record transactions when they are incurred (i.e. when the exchange of goods or services happens and not necessarily the same time when the actual money is handed over).
If you don’t have a dedicated accountant and less experience in accounting, then you might want to go with the cash basis method.
Leverage Software to Record Every Expense
Last but not least, you need to leverage software to record business expenses. Gone are the days when paper and pencil were relevant. Now, there is a myriad of different Softwares that can help you track expenses.
For instance, you can use a check stub maker to record payroll expenses. You can use banking applications to categorize your expenses. And then, you can use Excel to keep a master record of all expenses.
How to Keep Track of Business Expenses, Made Simple
There you have it — now that you know how to keep track of business expenses. All that’s left is for you to pick a system that works for you and start implementing it. With the right system in place, you’ll be knocking out one of the most complicated business tasks with minimal time.
For more business advice, be sure to check out the rest of the articles on the website!