Since the onset of the COVID-19 pandemic, small businesses have been closing left and right.
2020 is a scary time for businesses. If you don’t want to become another small business struggling to hang on, then it’s important to stay on top of the challenges headed your way.
In addition to the pandemic, some of the biggest challenges are facing right now are accounting related.
Read on to learn about the accounting issues small businesses are facing and how to overcome them.
Changes in technology are one of the current accounting issues small businesses face. Advancements sound like a good thing, and they are, but they’re also hard to stay on top of.
Accountants for small businesses need to stay up-to-date on the technology coming out and relearn entirely new processes. This takes time and commitment.
In the upcoming year, robotic process automation (RPA) and 5G service are two of the biggest advancements changing the game.
Although they will make data sharing and analysis more efficient and accurate, you’ll need to ask yourself what portions of the job need to be done manually.
Understanding Tax Law
Tax code changes occur frequently, and they impact small businesses’ budgeting decisions and tax preparation. As a result, it’s essential that you stay informed about changes in tax law.
The Tax Cuts and Jobs Act is one of the most important of recent changes that every small business owner should read up on.
The pandemic has also impacted tax deadlines and refunds, as well as the number of businesses that have needed loans.
Hiring an outside Chief Financial Officer (CFO) for help staying informed and making key decisions is advised.
In 2020, 70% of businesses have increased cybersecurity spending.
Effective cybersecurity is essential to business success. Without it, you could lose valuable data and confidential information.
COVID-19 has increased the number of cyber attacks this year, which is why more businesses are investing in their security.
It’s suggested that you invest in advanced security systems, backup your data, and start using multifactor authentication.
One of the biggest culprits of accounting issues for small businesses is DIY bookkeeping. Business owners attempt to save money by handling their own finances and up losing money down the road.
This leads to a host of accountancy issues managing cashflow, creating accurate monthly reports, recording all expenses, and managing payroll.
To keep your accounting and financial situation in tip-top condition, it’s advised that you outsource bookkeeping tasks.
This will allow you to optimize your tax deductions down the road and prevent incidental fraud and auditing.
Protect Your Business From These Common Accounting Issues
Running a small business is hard enough without accounting issues making it harder.
To keep your business running successfully throughout 2020, you’ll need to be proactive with your finances. This includes staying up-to-date on tax changes, technology advancements, cybersecurity management, and bookkeeping.
Doing it all on your own can be hard.
If you want to save money and make managing your business’ finances easy, check out our variety of financial services today.