You are responsible for maintaining the books of your business. Your company’s success will depend on having accurate and up-to-date accounting records. If you don’t pay attention to your accounting tasks, your company can quickly sink.
These bookkeeping tips will help you keep your books in order.
Bookkeeping tips for small businesses
These seven Bookkeepers tips will ensure that your books are correct from the day your company was founded.
Separate personal and business finances
Although it may seem like a good idea, co-mingling expenses can quickly lead to major headaches for small businesses.
To keep your personal and business expenses separate, you should open a business bank account right away.
A business bank account can be a great benefit for your business. You can benefit from a business bank account:
- Be true to your budget
- Organize your accounting records
- Maintain order in your business finances
Separating funds may be required in certain cases. You must open a separate business account if your business is an LLC, or a corporation.
Automate as much of your work as possible
Automation can save small business owners a lot of time and money. Automating your business will allow you to have more time for it.
Automating your accounting processes with accounting software can help you streamline your accounting tasks. Software can replace spreadsheets and manual calculations.
When searching for accounting software, consider security, accessibility, storage, and security. You should make a list of the essential features that your business needs, such as pricing and reports.
Do your research before you rush to buy software. Make sure you do your research to determine which software is best for your needs and those of your company.
Keep detailed records
Organization and maintaining accurate accounting records, such as receipts, invoices, and expenses, can make or break your company’s books. Failure to maintain accurate records can lead to financial problems for your company.
If you like to keep paper records, make sure they are stored in a safe and secure place, such as a locked filing cabinet. Make sure to keep your paper accounting records organized with different labels and sorting strategies, such as chronological order.
Electronic records are better than paper records if you don’t like the idea of having to keep them. For safekeeping, keep paperless copies of your accounting information on your devices and in the cloud.
Keep both a paper-based and a paperless copy of your accounting records to protect them. This will ensure that you always have backup copies in case your accounting information is lost, misplaced or destroyed.
Set reminders for deadlines
It can be easy for busy business owners to lose time and miss deadlines. It’s not long before another month or year passes.
Set reminders to avoid missing deadlines, and ensure your books are ready for tax season. To ensure that you don’t miss any due dates, add business tax return due dates to your calendar. To track important dates and set reminders, you can use a digital calendar such as Google Calendar.
You can plan ahead and save money for taxes. This will allow you to pay your taxes on time and avoid deadline-related penalties.
Keep an audit trail
Do you remember the tale of Hansel & Gretel? You may recall the story of Hansel and Gretel. They left breadcrumbs as a trail to help them find their way home. An audit trail is similar to breadcrumbs. It helps you retrace your accounting steps.
An audit trail is a collection of documents that support the transactions you keep in your books. The audit trail helps you to track down transactions and verify that they are correct. You can use audit trail documents to track down purchase orders, invoices, or estimates.
Audit trails can be used to help prevent fraud, increase accuracy, and locate missing transactions. Keep an audit trail to ensure that your accounting records for small businesses are accurate.
Keep track of business expenses
Certain expenses can be hard to predict. While some expenses can be predicted, others are not. Your business will fare better if it can plan for the unexpected.
Keep a detailed record of all expenses. This includes supplies, inventory, insurance, and utilities. You should also create a plan for how you will handle unexpected expenses. This will allow you to better plan for larger expenses and avoid being caught unprepared in the future.
Your books should be at the top of your priority list
You have a million things to do as a small business owner. It is tempting to put your books aside and focus on your business. Prioritizing your books is a must if your business wants to succeed and your finances are in order.
Keep your books organized and up-to-date from the beginning. You’ll soon find yourself in small business bookkeeping if you don’t keep your books up to date. You can avoid the tedious task of accounting by taking time to update and review your books.