If you've been looking for ways to help your business bookkeeping be more successful, look no further! Here are 4 basic tips you need to know to get started.
1. Record Transactions Correctly
Why
This will keep you up to date on where your money is going and how your business is doing allowing you to control cash flow and make better decisions. It will also help make sure you don’t miss tax write-offs (keep those receipts!) or pay taxes on more money than you actually made.
How
Stay organized by maintaining separate personal and business accounts and set up a consistent recording system - whether it's using an Excel spreadsheet or software such as Quickbooks Online or Xero.
2. Set aside money for major expenses and paying taxes
Why
You'll be more prepared and less likely to need a loan once expenses arise.
How
Consistently set aside money creating separate accounts for taxes and major expenses such as inventory, office supplies, computer or equipment upgrades, and repair and maintenance. It's also a good idea to make a note of tax deadlines on your calendar to avoid penalties and interest.
3. Consistently monitor your invoices
Why
Late or outstanding invoices will hurt your cash flow.
How
Be sure that this specific task is assigned to someone in your organization and put a process in place to follow up after 30, 60, and 90 days. You might also want to consider implementing a late fee or penalty to encourage timely payments.
4. Avoid Cash
Why
Receipts can be easily misplaced and without a record of purchase it's very easy to lose track of these transactions.
How
Use your company debit or credit card for all transactions.
And remember, you always have the option to hire a great bookkeeper to help you make sure all of these bases are covered! Not only does it give you more time to focus on the core reason that you started your business in the first place, it also gives you peace of mind that all of the details are taken care of and you'll have the most recent financial health records for your business available at your fingertips when you need them.