Are you a small business owner who loves studying a spreadsheet? Probably not. Your business’s books are a way to tell how well you are performing, but if you’re not really a numbers person, doing your bookkeeping may sound pretty unappealing. Many business owners have good intentions of keeping up with the business finances but get distracted by the day to day needs of their business, and don’t get around to it. However you feel about bookkeeping, it’s a task that no business owner can put off forever.
- Separate business and personal finances. Combing your expense and income is a mistake that is common in small business accounting. It can cause huge headaches for you you later on as your business grows. Open a business bank account as soon as you start your business, and a get a business credit card. This separates your accounts and helps your business to build a credit rating of its own.
- Automate whatever you can. Entering data into spreadsheets and reconciling the numbers manually is an old school method. Instead, use bookkeeping software or services like Bench, and do your business banking online. This means you can sync your bookkeeping software with your business bank accounts you have accurate, up-to-date records. Back up your financial data to the cloud, so it is safe off-site.
- Ask a professional. Talk to your accountant to see if you could use an off-the-shelf accounting software solution, or would do better with a customized version. Your account can offer advice and should be able to set up your software and show you to properly use it.
- Perform regular financial checkups. If you put off your bookkeeping for too long, you can end up with problems like bounced checks, overdue invoices, or figures that won’t add up. Go over your books every week to make sure everything is on track.
- Do a quarterly review. At the end of every quarter, you should take an in-depth look at your records. Look for trends like growing or declining sales, year-on-year revenues, or an increase in late-paying customers. Talk to your accountant. They can help you to look at the bigger picture so you’re prepared for future capital needs, like buying equipment or moving to new premises.
- Keep records of business expenses. Tax codes often change, so you should ask your accountant for guidance on the kinds of expenses that you can deduct next year. Anything that you think you will claim for needs detail records. Make this easier by scanning and digitizing your receipts. You can make it easier to track expenses by always using a business credit card for business purchases.
Monitor your employees hours with time tracking software. Cloud-based time tracking software lets staff clock in and out on a smartphone, tablet, or computer. This saves them hassles, but also make your life easier, as it will automatically keep track of overtime, time off, and sick days. You can find time tracking software designed for specific industries. Choose the one the works best with your bookkeeping software and make payroll much easier too.