Bookkeeping is one of the most difficult parts of running your own contracting business. Keeping accurate records of your finances means that your business can function transparently and efficiently. These tips will help to make your bookkeeping much simpler.
- Use different checking accounts. The easiest way to keep track of your expenses and profits is to keep separate checking accounts. To do this properly, you ought to have three different accounts, each with its own purpose. One account is where you deposit the money that you have earned. Transfer money from this account to other accounts as needed. Your second account is only for payroll purposes. Your third account is your petty cash account. This lets to see how much cash you have on hand all the time.
- Keep track of receivables. Every payment you receive from customers should be carefully recorded, so you always know who is paid up and who is late. Without these records as part of your bookkeeping, it’s easy to lose track of who owes you what.
- Create a business plan. A business plan that has been solidly formed will help you see the direction that you’re heading in. By setting clear goals, you know how much work you need to do to meet them. Setting out a marketing strategy for your company can help you to become more profitable.
- Keep backups of your records. Thanks to advances in technology, it is much easier to store backups of all your documents. With cloud-based technology, you have nearly unlimited storage capabilities for affordable prices. If you keep backups in the cloud, you’ll make sure that your contracting business has access to any information you need to function, wherever you are.
- Use accounting software and applications. Technology can help you here too. Use software and apps to help you keep track of your expenses, receivables, taxes, and everything else. Most of these tools are easy to learn and are a cost-effective way to keep your bookkeeping in good order.
- Keep track of expenses. As a contractor, it can be easy to lose track of what you spend on supplies on a project. Keep all of your receipts and enter them into your books so you can keep project costs under control and complete jobs having made a profit.
- Hire a professional account. When you own a contracting business, taxes can get complex. The best way to avoid any problems during tax season is to hire a professional accountant or bookkeeping service like PAS Consulting LLC to help you. They can help you maximize deductions and make sure you’re paying the tax you owe.
- Keep track of bills. Running a business costs money. When you sit down to record your receivables and expenses, you need to track your bills as well so you don’t worry about underpaying or missing payments.
- Outsource bookkeeping. Hiring an outside company to manage your bookkeeping can help to make it easier to organize your books. Many companies over different levels of service, from organizing paperwork to full control of your books.