Talking Cents

Accounting elements for a small business to stay health

It is extremely important for small businesses to stay healthy in order to be sustainable and profitable but what are the elements needed?

1. Sufficient credit balances

A healthy business will have enough spare credit. To have a high level of unused credit balance means not using up all credit cards and loan borrowing capabilities. Less successful businesses tend to max out and many do not have any credit available.

2. Use credit wisely

Successful businesses usually have good and strong knowledge about financial terms and credit products. Use those terms wisely to your business benefit.

3. Proper budgeting

The power of budgeting should never be underestimated. It sounds easy, but not at all. Successful small businesses always budget their expenses well so that they can make important business decisions for major plans. Proper budgeting also means to have separate bank account for business-related transactions. You do not want to mix personal accounts and business accounts up and bear the painful consequences of recall which transaction is for what.

4. Sufficient cash for payroll

One of the top drivers for a business to shut fastest is not being able to pay their employees on time. Apart from employees, do not forget the government. If a small business does not pay its payroll tax continuous, IRS will act fast and put you out of business. Therefore, successful businesses always make sure they have sufficient money in their cashbox to pay employees, cover payroll taxes, health insurances and benefits expenses.

Does your small business have these four elements to stay healthy and profitable? M.A.S is a team of professional small business accountants and bookkeepers with diverse experiences who strive to help businesses in Sydney and Melbourne to stay healthy and profitable.