Many small business owners immediately hire an accountant or bookkeeper out of fear of being able to handle their business’s finances on their own. Your business’s finances are incredibly important, but there are simple ways you can manage it at the fraction of the cost of a professional.
How to manage your small business bookkeeping on your own:
Use customer invoicing software
This is probably the most important decision you can make for your business. Customer invoicing software is a fast and simple way to track all of your expenses from anywhere, at any time. These software programs are designed to be as simple as a matter of data entry, since all the formatting and calculations are done automatically. They have easy to use fields and toolbars and every report is instantly updated each time a new receipt is entered. Once the initial setup is complete, customer invoicing software gives you the ability to create and email customer invoices in a matter of minutes.
Devote one hour each week to bookkeeping
If you are using a customer invoicing software, all it will take is one hour every week to enter your bills and payments for the week, generate key reports like a cash flow statement and income statement, and then review them to ensure there are no potential problems. Set aside a specific time (like first thing Monday morning) that is devoted solely on maintaining and monitoring your bookkeeping.
Reconcile Your Bank Statements
Never assume that everything is accurate just because you are using an automated system. There is always the potential for human error in regards to bookkeeping. You could simply enter a 2 instead of 5 and not notice it, even if you make a point of double checking your work. If a company fails to reconcile their bank statements every month, these errors may go undetected, which will affect future data. The reconciliation process gives you a method for double-checking errors that you could have made, as well as errors that were made by your bank.
Pay attention to Payables & Receivables
There are two things every business needs to ensure when they are managing their bookkeeping. They need to make sure they are paying people on time and they need to make sure they are being paid on time. During the time you have scheduled to update your books with new receipts, run a quick payable and receivable report, so you can double check that nothing is past due.
Thanks to modern technology, there is no specific skill set required to manage your bookkeeping. As long as you can type information into open cells and select print, all the information and reports will be there for your reference. Try handling it on your own, before you consider paying someone hundreds of dollars each week to do it for you. An hour or two of your time each week could save you thousands in the long run.