Accounting made easy for companies: This is how to keep perfect cash books

Keeping a chronological record of all business expenses is the foundation of proper accounting.

21:28 29 November 2024

Well-organized accounting is at the heart of a successful business. According to a study by PwC, companies worldwide spend an average of 15% of their working hours on accounting tasks. In particular, managing invoices, cash receipts, and other financial records often poses a challenge. Incorrect documentation not only results in wasted time but can also have legal consequences. To avoid this, a company needs clear structures, efficient systems and the ability to archive data reliably. This article shows how financial records can be optimally managed.

Organizing receipts

Keeping a chronological record of all business expenses is the foundation of proper accounting. Studies show that companies that do not systematically document their expenses spend up to 20% more time managing receipts and run an increased risk of financial losses due to missing documentation. A good example is the purchase of displays and holders for a trade show booth on the 5th of a month. This receipt should be entered immediately after the transaction to ensure that no expense is forgotten. Timely documentation not only reduces the risk of errors such as double-posting, but also makes the tax return process much easier. According to a PwC survey, companies that sort their receipts chronologically need an average of 30% less time for their tax returns because the data is clearly laid out.

At the end of the month, it is essential to check all receipts and save them in a central system. Digital accounting systems offer significant advantages for this. According to a study by Deloitte, 55% of companies worldwide already use digital tools, resulting in time savings of 25%. Using such systems enables a precise liquidity overview, since all data is currently available. The regular archiving of receipts ensures that important documents remain available in the long term.

Use tested POS systems

A modern POS system is indispensable for retailers. These systems not only ensure quick payment processing, but also offer extensive accounting and data analysis functions. A tested POS system can automatically capture transactions and generate detailed reports that are essential for tax or business purposes. In addition to the software, the quality of the consumables also plays a crucial role. In particular, the thermal paper used for cash register rolls is essential for reliable documentation. 

A good POS system is characterized by precise recording of all income and expenses. Such systems are indispensable, especially in the international market, where additional requirements such as multilingualism and currency conversions are added. For example, according to a study, 78% of medium-sized retailers worldwide use digital POS systems. These allow the storage and export of data, which makes tracking and evaluation much easier. Regular maintenance is also important to ensure long-term functionality.

Tax laws apply to business owners

In the US, companies are subject to a variety of tax laws at the federal, state and local level. The main tax liabilities relate to income tax, payroll tax, excise tax and, where applicable, sales tax. Each type of business, whether it is a sole proprietorship, partnership, corporation or limited liability company (LLC), is subject to specific rules that must be strictly adhered to by business owners.

Bookkeeping and tax returns

Businesses must accurately document their income and expenses to meet tax requirements. A tax return must be filed with the IRS annually, using different forms depending on the type of business, e.g. Form 1120 for C-Corporations or Form 1065 for Partnerships. In addition to the federal tax return, additional state-level returns may be required.

Strict deadlines and penalties

Failure to comply with deadlines and regulations can result in heavy fines. For example, interest and penalties are incurred if taxes are not paid on time. Businesses are therefore required to make quarterly advance payments to cover their tax liability in a timely manner.

Sales tax and excise taxes

Sales tax, also known as value added tax (VAT) in some countries, is regulated at the state level. The amount varies between 0% and over 10%, depending on the state and municipality. Businesses are required to collect and remit this tax on sales within the respective state. In addition, there are excise taxes on specific products such as alcohol, tobacco and fuel.