Nathan Mayfield, Vice President of ResNexus, emphasizes the importance of proper accounting for businesses, especially in the hospitality industry. Maintaining accurate financial records is crucial for cash flow management, tax compliance, and credibility. Mayfield provides three key bookkeeping tips for business owners to follow: keeping personal and business finances separate, establishing a salary for themselves, and considering accrual basis accounting.
The first tip involves opening a separate bank account for business transactions and using a company credit card for expenses. This helps keep financials organized and clear, while also having legal and liability benefits. The second tip emphasizes the importance of setting a salary for owners, based on the financial performance of the business. A consistent and sustainable salary can help provide predictable cash flow for personal finances. The third tip suggests considering accrual basis accounting, especially for hospitality businesses that deal with high-value transactions paid in advance.
Accrual accounting allows for more accurate and consistent bookkeeping, recognizing revenue when it is earned rather than when cash is received. This method is particularly useful for businesses with future bookings and deposits for services not yet rendered. By using accrual accounting, companies can better manage liabilities and reserves for cancellations. Mayfield recommends hiring an accountant to ensure proper financial management and tax compliance, especially for businesses that may not have the budget for a full-time accountant.
In conclusion, Mayfield stresses the importance of seeking professional advice from a licensed accountant to address specific financial needs and requirements. The information provided is not investment, tax, or financial advice, and it is essential to consult with a professional for personalized guidance. The Forbes Business Council offers resources and networking opportunities for business owners and leaders seeking to grow their businesses. Nathan Mayfield’s insights highlight the significance of accurate accounting practices in elevating businesses and ensuring long-term success in various industries.
