When it comes to running a small business, bookkeeping cannot be left to the accountant alone. As the owner of the business, you have the obligation to instill accounting culture and procedures that will allow you to stay on top of the financial situation in your company.
Most of the business owners are not number focused people and have a hard time keeping up with numbers. But there are simple ways to sync your bookkeeping that will allow you to have highly calibrated financial statements without any need for hassle. Here is our top advice on the best ways of bookkeeping.
1. Keep your Personal and Business Finances Separate:
It should be common information but it is not, the truth is that most of the bookkeeping issues when bosses use company finances for personal use. Now, there is money taken out of the account that is not properly accounted for.
A good solution for that is to have a separate personal bank account and a Personal Finance Software like My Easyfi. That will allow you to have a clear personal account where you will keep all the money that you want to spend on personal use. Your bookkeeping practices can only become transparent if you are willing to commit to a lifestyle of transparency.
2. Automation Is Good:
Endless receipts collecting dust in a drawer is no way to run a modern business. There are endless modern softwares available online that will automate your bookkeeping for you. Most of them are specialized softwares so you have many options.
Do good research before choosing one that is right for you but we will highly recommend that you invest in one of these kinds of software to make sure that you are keeping a simple list of all the expenses.
Businesses like best affiliate marketing training by Affiliate Marketing Monks will make an endless list of expenses in a day and you will miss half of them if they are not recorded at the time of spending. The software will back up your data so that going through monthly and quarterly reviews of financial statements will feel like a breeze.
3. Hire a Professional:
Just because a kid knows statistics and you are also there to help him out, he is not going to be a good accountant. Whenever you get the budget for it, always try to invest in the best possible financial analyst you can get.
Bookkeeping is a long and complicated task that cannot be done without proper professional help. You will feel that things are going ok but they are not. Your business is suffering because you are not fully utilizing the potential of your finances.
4. Have Monthly Checkups:
Make sure that you go through your book at the end of every month. That way, you will know what financial decisions have to be made. You will also know if anyone is tampering with the book.
A good way to avoid fraudulent activity is to keep an eye on your finances in a regular fashion so that your finances will thrive.
5. Have a Quarterly Review:
Every four months, take out your books and check everything in detail. Firstly, make sure that there are no discrepancies in the accounting records that you keep and everything you have in the accounts department is in order.
Now that you have done that, look at the bigger pattern with your accountant. How much money is being spent in every department and how much of the ROI can be attributed in return. It will be greatly beneficial for you to look at the long term picture and get a real understanding.
6. Digitize Receipts:
There are many tax deductibles in place and more are being added every year. If you are able to keep a track of all of your receipt then you can claim most of your tax deductibles and gain real benefit in the long run.
That is why investing in softwares that are digitizing receipts for the user. If you have a long list of all the receipts that you have then you can easily count your tax deductibles. If there is a tax increase, then also, having all of your receipts in your hand will be of great help.
7. Time Tracking Softwares:
While we are at it, it will also be greatly helpful if you can track the time your employees are spending on the job. Many employes in the sales department have a one-hour dinner and put in the full night after hours in the balance sheet.
That leads to bonuses that are thoroughly uncalled for, that is why always know when you can actually trust them and should pay overtime. If you have a time tracking software that syncs with your bookkeeping software then your payroll will also be automated.
8. Account Receivables are Next:
Customer payment is the blood of the business, if a customer is not paying on time then you are in trouble. That is why always have a simple and clean strategy to remind them that they will get them to remember the payment part.
Keep it standard and always approach them from the office when you are reminding them about the payments. That way, the process will look automated and feelings will not be hurt. Always put payment deadline related clauses in the initial contract.
These are a few basic ways to make sure that your accounting systems are in order. You must have notices that we have placed great focus on softwares that will allow you to pay your way into good accounting habits. The reason is that it is hard to have the conviction to simply put in every transaction you had in the ledger or categories every receipt.
And even if you are incredibly good at all of these aspects, the truth remains that you will need to admit that none of that timeliness can compete with simple software.
As a small business, you will go for the smaller softwares and they are exceptionally economical. So we highly recommend that you get started on your bookkeeping improvement from today.
Emma Thomas is a content writer and a copywriter for bird of paradise linen clothing brand . A writer by day and a reader by night, she can be often found picking cherries in summer Afternoons