10 Accounting Practices to Ensure Profit Success
As a team of accounting experts with years of experience and passion beyond the numbers, we have seen how smart accounting practices can help a business thrive – and how lack of a financial management plan can destroy a business as well.
Whether your business is a startup, an established enterprise, or a non-profit, take a moment to learn about Perry & Associates CPAs’ top 10 accounting practices to ensure profit success.
1. Identify Your Financial Goals
We’ve helped businesses in various stages of their financial journey throughout the years, and one thing remains clear; having clear financial goals helps business owners create a more realistic financial plan, reach financial targets, efficiently allocate resources, set budgets and discover opportunities to grow revenue. Without a plan, don’t expect profit to expand!
2. Establish a Chart of Accounts
A chart of accounts is a structured system that categorizes and organizes all the financial transactions of a business. Essentially, it’s a blueprint of your financial system. It typically includes a list of accounts representing assets, liabilities, equity, income and expenses. It helps business owners understand and track money coming in, money going out, what you own and what you owe. It also makes the financial reporting process much easier.
3. Budget and Forecast
Budgets provide a structured plan for how a business will allocate resources, manage spending and track progress toward financial goals. On the other hand, forecasting focuses on projecting future financial outcomes by analyzing past performance and current market trends. Both work hand in hand to help business owners make informed decisions and avoid overspending.
4. Regularly Review Financial Statements
Schedule monthly or quarterly reviews of your financial statements. This will help you identify trends or potential problems at your place of business. Three primary financial statements to analyze are income statement, balance sheet and cash flow statement.
5. Maintain Proper Internal Controls
Strong internal controls minimize the risk of fraud and financial errors, which is critical to ensuring profit success. Our forensic team, Perry Forensic, recommends implementing policies and procedures that are designed to protect assets, ensure accurate financial reporting, support regulatory compliance and keep all members of the team on the same page. Ways to do this include separating responsibilities among staff, implementing clear procedures and performing routine audits.
6. Use Automation to Streamline Accounts Payable and Receivable Processes
Streamlining accounts payable and receivable processes means automating and optimizing how a business manages incoming and outgoing payments to improve accuracy, speed and cash flow. It reduces manual work, minimizes errors and ensures timely billing and payments. As a forward-thinking and ever-innovating team, we have experts who know the ins-and-outs of accounting software that can provide support and the expertise needed to set up and manage these systems.
7. Stay Compliant With Tax Regulations
No accounting best practices list would be complete without reminding business owners to stay on top of their taxes! Maintaining tax compliance is vital to your business’s overall financial well-being, and involves keeping accurate financial records, staying informed about current tax laws and regulations and identifying key tax planning opportunities that minimize your tax liabilities. Sound overwhelming? Then contact our tax and accounting experts.
8. Conduct Regular Audits
Conducting regular audits is an opportunity to receive constructive feedback, improve processes, identify risks and become aware of financial reporting concerns. At Perry & Associates CPAs, our auditing services gives our clients an intensive review of their systems and records to provide the highest level of assurance.
9. Set Clear Profit Goals and Monitor KPIs
Set clear profit goals and monitor key performance indicators (KPIs) such as cash flow forecast, inventory turnover, customer retention and revenue growth rate to evaluate progress and guide strategic decision-making.
10. Work With Accounting Experts like Perry & Associates CPAs
Partnering with a professional accounting firm can streamline your operations by saving time, minimizing errors and ensuring regulatory compliance. We are invested in your success and have a deep commitment to providing services in a way that are always responsible, reliable and accurate.