How to Get Your Accounting in Shape for Busy Season

4 Accounting Tasks for Your Busy Season

Seasonal business accounting depends on you planning ahead. Once your business’s busy season hits, you don’t have time to slow down for bookkeeping issues. Use these strategies in your program for small business accounting to streamline and grow your business.

Accounting tips for your busy season

Focus your accounting on tasks that save you time and money. Try these four accounting tips for managing your busy season.

Task 1: Plan your expenses

Handling seasonal business expenses can be tricky. Even though you only operate for part of the year, you might pay some costs year round. These costs could include rent and insurance.

Many of your year-round costs are fixed expenses. Fixed expenses stay the same from month to month and are not affected by revenue.

To manage fixed costs, talk with creditors about making higher payments during busy seasons. During your busy season, you have more gross income and can pay more towards expenses. Also, it may be less stressful to make smaller payments in your slow season.

For example, you run a restaurant in a tourist town and pay rent all year. But, you only operate your business in the summer. You might ask the property manager if you can make more rent payments in the summer when sales are up. Then, you might pay lower rent during the off season.

Try to pay off expenses from the last season before the next one begins. You do not want to carry over debts from one season to the next. Since you make your income in just a few months each year, the liabilities could add up to a long-term burden.

Task 2: Maintain a healthy credit record

Though you don’t want to rely on lines of credit to run your business, lines of credit can help when revenue is low. Your expenses might increase before your busy season. You have little income, but you need to make purchases to operate. Opening a line of credit or getting a business credit card can help you pay the expenses. When you earn income during the busy season, you can pay the debt.

Investigate different credit options. Some lines of credit are designed for seasonal businesses. For example, some SBA loan programs help you pay short-term expenses. You pay a seasonal business loan as a lump sum by a predetermined date.

Task 3: Collect income

If you invoice customers, make sure your system for invoice collections is effective. Include all the information customers need to pay you on your invoice. Some information might include your name, contact information, and the amount owed. Don’t put off sending invoices, especially toward the end of your busy season.

Review the amount of time you give customers to pay after receiving the invoice. Format your invoice payment terms to improve your cash flow. To collect payments faster, you may need to shorten the amount of time customers have to pay you. You can give early-paying customers a discount and late-paying customers a past-due fee. Put your terms in a customer bill payment policy.

After your busy season, collect any money owed. You may need to remind customers of their payments due. Try to start the next busy season without uncollected payments.

As you collect income, set some money aside to cover long-term needs. Building a cash reserve helps you prepare for unexpected expenses and expanding your company. Open a business bank account to keep company earnings separate from personal funds.

Task 4: Manage inventory

When your busy season ends, you may have leftover inventory. Storing old merchandise does not earn revenue. Hold a clearance sale to get rid of old inventory for more earnings after the busy season.

Spend slow seasons planning for the next busy season’s inventory. Use accounting software to record expenses and sales. Then, decide how much inventory you will need next season. Make projections for next season’s revenue.

Also, spend time between your busy seasons to create relationships with vendors and suppliers. Vendor relationships are key to buying goods and inventory. You may be able to negotiate payment terms after your form a relationship with a vendor. The terms could save you money on goods.

Seasonal businesses need to keep their financial records in order all year round. Simplify your bookkeeping process with Patriot’s online accounting and payroll software. You can get started today with free setup and support.

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