Bookkeeping is probably not the most exciting part of your day, but it is crucial component of running your own business that cannot be ignored. Whether you hire someone else to do it for you or do it on your own, it needs to be regularly maintained and monitored. In order to make that process a little less daunting, we’ve compiled some quick and easy bookkeeping tips for your small business.
Seven Best Bookkeeping Tips for Small Businesses:
Organization is essential
If you start right from the beginning with an easy-to-follow and organized system, it will be easier for you to maintain and adjust it as your business grows. Research various bookkeeping methods on the internet and find one that makes sense for the size of your business and what you need it to accomplish.
Use an online bookkeeping system
One of the most organized bookkeeping systems you can choose is online billing software. It offers pre-designed templates, auto-fill-in forms, and helpful financial reporting that can make managing your business as simple as logging into a website.
Schedule a set time each week to enter all invoices
Make sure that there is a portion of your weekly agenda designated specifically on managing your finances and updating your records. Depending on the volume of invoices you receive, this should be easily accomplished in 30-90 minutes per week, especially if you are using an online bookkeeping system with quick entry fields and handy drop-down toolbars.
Reconcile bank statements monthly
Even if you regularly review your cash flow statement and your bank statement separately, they should still be double-checked and reconciled. This will help you quickly spot discrepancies if they happen to occur.
Create a separate account for taxes
Separating the taxes you will owe from each receivable as it is paid will put you in a better position when it is time to file your taxes. This way if you end up owing money, you will already have it saved up, hopefully with a surplus that can be invested back into the business.
Review your cash flow statement as often as possible
The cash flow for most small businesses is constantly fluctuating, which means it needs to be regularly monitored. If you are using an online bookkeeping software program, it will be easy to generate and review your cash flow statement from anywhere. This way you can avoid insufficient fund charges by researching financing options in advance and making sure all of your debts are covered.
Review your receivables and follow-up on past due invoices
It is safe to assume that the majority of your clients will pay on time, but you will always encounter a few stragglers who take longer than agreed on. Regularly running an account receivable report will help you catch it sooner, so you can follow-up with a professional reminder.
That is really all it takes to manage your finances! Following these seven simple tips will give you the best bookkeeping system for your small business.