The Ultimate Guide : How To Do Bookkeeping & Accounting For Supplement Companies
What Does Bookkeeping For Supplement Companies Mean?
In this chapter, we help you know the importance of bookkeeping for supplement companies:
If you are from the supplement sector, you might be wondering why bookkeeping and accounting matter a lot. In the supplement market, bookkeeping is important and shouldn't be ignored in any way. If you run a supplement company, you want to run it as efficiently and profitably as you can. This means that you will require well-organized financial records that help you get in the right direction.
So how exactly can you keep up with the bookkeeping tasks?
If you are operating a supplement company, the major step for you is to keep with accurate financial numbers. In case, your inventory gets too low or the prices of supplement products get too high, you are surely going to miss out on valuable sales.
Bookkeeping and accounting is the only way to keep a track of numbers that matter for your business's financial health.
How much money did you spend on new stock?
How much money did customers bring in for you?
You can use bookkeeping to gain control over some of the most crucial finance-related tasks. You can keep track of, arrange, and comprehend what is happening in your company with the quick support of bookkeeping and accounting.
Even if there are many ways to manage this data, writing it down in a spreadsheet isn't sufficient for long-term use. Instead, you need a standardized way to keep track of financial transactions so you can track the progress of your company over time.
Some of the duties performed by those who work in the supplement industry are:
- Maintaining financial records
- Setting and maintaining budgets
- Payroll and paying bills
- Safeguarding information of customers
- Making informed decisions
- Handling investments and cash management
- Complying with federal regulations
- Balancing sheets
- Performing cash flow analyses
- Filing taxes
How does Bookkeeping Differ From Accounting?
An understanding of accounting and bookkeeping is more important than ever for supplement service providers. Don't let both confuse you. While accounting uses financial data to determine the financial situation of the company and make management choices, bookkeeping is the process of reporting financial data.
Bookkeeping means a proper record of financial information whereas accounting is the analysis of that financial information and further development of a financial strategy.
What’s Involved In Bookkeeping?
- Making payments and bills
- Collecting payments from customers
- Ensuring your supplement company pays the right amount of tax
- Claiming back tax
- Managing payroll
What’s Involved In Accounting?
- Analyzing and providing trustworthy information about financial records.
- Financial reporting
- Taxation and auditing
- Updating accounting systems and processes
Small Business Accounting Vs Big Business Accounting
The activity of Accounting Volume
If we consider the most common difference between small and large-scale businesses, it is accounting volume. A small business relies on less business; which means fewer paper invoices and accounting documents to handle. If you are in the initial stages of the business, you have to handle only a small number of customer accounts.
From the accounting point of view, running a small business requires less expertise and maintenance to handle books. Also, the financial statements are quite simple to compile, read and explain. The whole task can be well handled without professional accounting help.
On the other hand, as your business expands and your volume increases, things get a little more complex. It takes more time for a supplement service provider to keep up with a large number of invoices and documentation. One needs to handle more customer accounts. Which also adds up to more paperwork.
In the situation of accounting for mid-size and large-scale businesses, hiring a bookkeeper or professional CPA is the best bet. An expert helps you stay on top of your business books. You will better understand the complexities that often arise with managing a big business.
Cash vs. Accrual Accounting Method
There are two types of accounting used by businesses: accrual or cash. Fewer regulations are involved in cash-basis accounting, which makes bookkeeping simpler. With this approach, you can easily keep track of transactions. Regardless of cash flow, accrual accounting mandates that you record transactions as soon as you become aware of them.
The accrual method of accounting must be used by larger supplement companies. The accrual technique has more complex rules that may necessitate continual education. Small business owners who want to manage accounting tasks themselves without hiring an accountant could use the cash method. Without the requirement for continuing education only to stay up with all the rules and regulations, your accounting typically takes less time.
Bookkeeping Practices To Keep Up With Smooth Supplement Selling
Keep Record Of Every Payment
Keep track of every payment in your books and note the date it was paid or received so you can quickly locate it if you need to refer back to it later.
It can be challenging to keep track of business spending, but utilising a business credit card, for instance, can help you make sure that everything is maintained in one place and recorded. To make things much simpler, categorizing your bills into different categories of expenses is the simplest method to accomplish this. The mileage of a car is one instance. When traveling long distances for business meetings, it's a good idea to keep track of your mileage and record both the distance traveled and the associated expenses.
Always Keep Your Records Organised
Cluttered records will cause you further bookkeeping headaches if it's already difficult to look through one account where both personal and commercial monies are pouring in.
You may save a lot of time by knowing exactly what is stored where when records are in good condition and are organized well. You'll be grateful that you took the time to keep your records organised so that you may save time by knowing exactly where to search if you're too busy and nearing tax deadlines.
It's time for you to part ways with your disorganized books. Consider hiring a professional that is more familiar with your books and will continue to complete your bookkeeping on time. They are the only people who will inform you if something goes wrong with your transactions.
Maintain Daily Records
Keep daily records; this is one of the most fundamental guidelines to follow. Maintaining thorough daily records can make it much easier for you to monitor your company's financial health. Create a system and follow it religiously so that you may maintain correct records every day and avoid errors when you file your tax returns.
Stay on Top of Your Accounts Receivable
Customers who pay late are never a nice thing, and they can hurt your cash flow. Make sure to keep track of when your receivables are due and take immediate action if they are past due. Try to come up with a plan to receive the money you're owed as soon as you can; the longer you wait, the more damage it will do to your cash flow.
Keep Tax Deadlines in Mind
Anybody can feel anxious before a tax deadline. Set a reminder for yourself as a quick and easy way to ensure that you have enough time to complete your tax returns accurately. You can make sure your taxes are submitted before the deadline by maintaining correct records. Additionally, you evade any unwelcome penalties.
Know when to outsource your bookkeeping
It might make sense to perform the bookkeeping yourself if your business is modest at first. Keep track of how much time you spend each week on the books as you advance. Calculate the dollar value of your own time and contrast it with the price of a bookkeeper. It might only take a professional bookkeeper a few hours to process a month's worth of accounting, so it won't be long until this is a better bargain.
Bookkeeping Essentials: How To Succeed In the Supplement Industry?
Maintaining proper bookkeeping practices will not only help you make sure that everything runs well in your company, but it will also enable you to see any possible financial problems and address them before they become out of hand.
However, handling your bookkeeping responsibilities can feel onerous if you're not naturally good with money or numbers. Which bookkeeping duties must you perform each day? Which duties must you complete each week? What about every month, every three months, and every year?
The Essential Bookkeeping Checklist For Supplement Brands
Daily bookkeeping Tasks List
- Review your financial situation. You should always be aware of the cash flow of your company; you should know how much money is coming in, going out, and being held in reserve. Because of this, it's crucial to assess your financial position each day at the start and end of the day.
- Consider utilizing an accounting based method, you should keep it as current as you can so that you have a clear understanding of your company's finances and can generate precise financial reports as needed.
Weekly bookkeeping to-do’s
- Examine your company's credit card and bank accounts. You can remedy the problem more quickly the sooner you identify any discrepancies on your business bank or credit card statements.
- Examine and pay the bills. Make sure to verify deadlines, examine open invoices, etc. every week.
- Deliver invoices. Sending invoices more regularly will increase your likelihood of receiving payment, so send one each week rather than waiting until the end of the month. Include payment terms as well so that your clients are aware of the due dates for payments.
Monthly bookkeeping to-do’s
- Prepare payroll and pay payroll taxes. Additionally, you must pay the required federal and state payroll taxes.
- Take a look at your balance sheet. your month-end financial sheet for review. It will help you gauge how well you did financially for the month, how you did in comparison to previous months and years, and any areas where you could do better.
- Investigate unpaid invoices further. Review your receivables at the end of each month. You should check on payment for any unpaid, past-due invoices at least once every month.
Quarterly bookkeeping to-do’s
- Tax payments in advance. You'll have to make estimated tax payments each quarter.
- submit payments and payroll records on a quarterly basis.
- Spend sales tax. You can also be required to pay quarterly sales taxes, depending on your state.
Annual bookkeeping to-do’s
- Submit the required IRS paperwork.
- Make your financial year-end reports.
- assemble the data you'll need for your taxes.
- Register to pay taxes. One of the most crucial annual bookkeeping duties is filing your business taxes, so make sure you do it every year.
How To Do Bookkeeping & Accounting For Supplement Brands?
Managing Your Bookkeeping On Your Own Vs. Hiring A Bookkeeper
Although outsourcing your books can seem like the easiest and most straightforward option, it could not be. Accounting and bookkeeping services might not even be cost-effective for your supplement company, depending on its size and level of complexity.
By managing your own books, you can gain new accounting and financial management skills. This information can inspire business executives at any stage to make more informed decisions about potential future growth. Additionally, keeping your own books enables you to feel more connected to your finances.
The cloud-based accounting system, however, can make bookkeeping a simple and rapid process. However, doing it yourself may end up costing you more money in the long run than hiring a professional if bookkeeping is simply not your thing.
Saving time is one of the key justifications for hiring a bookkeeper, but development is also a crucial one. Hiring a qualified bookkeeper will provide you with a lot of peace of mind in addition to ensuring that your finances are accurate.
Excellent bookkeepers will get to know your specific financial needs and may even be able to provide you with expert advice on your company's financial position. While hiring a bookkeeper can free up more time for other activities, you should also maintain an eye on your books.
Even if you use a third party to handle your books, you should routinely analyze your financial statements to keep abreast of your financial situation.
At FreeCash Flow, we provide small, mid-size, to large-size supplement firms with bookkeeping, accounting, tax, and other services. When handling every facet of your finances or offering assistance with preparing your yearly tax return, we bring years of knowledge to the table.
Picking An Ideal Accounting Method That Works For Brands
A Better Alternative Is Accrual Accounting in the "Cloud" Accrual accounting may seem like a lot of work all at once. Contrary to popular belief, business owners may not necessarily need to handle every aspect of their operations. Thanks to dozens of tools created specifically to assist supplement companies in managing accurate books more quickly, no knowledge is required. Maintaining your finances takes time, but you may free up your time by using the clever automation technique called "CLOUD".
For your internet business, our devoted team handles ALL of your bookkeeping needs. We offer clean books you would be glad to show anyone, including cash reconciliations, vendor setup, chart of accounts, controlling inventory value, and depreciation reports.
Below are some of the final key takeaways to find out what you have learned:
- While supplement companies focus on enhancing someone's health, they don’t have much time to handle billing, payments, and taxes. Thankfully bookkeeping and accounting exist to make life easier for supplement companies.
- Whether to choose cash or accrual method-based accounting, all depends upon your business.
- Accrual-based accounting is effective for businesses if they are above the level of complexity.
- Hiring CPAs for the handling of business finances is a smart move. An expert handles everything from managing financial reports, balance sheets, cash flow analyses, and other aspects.