Bookkeeping is probably not the most exciting part of your day, but it is a crucial component of running your 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. By keeping your financial records organized throughout the year you will be able to keep your business focused. Additionally you will be able to assist your accountant when it comes time for the financial year end.
Here are 12 bookkeeping tips to help your business stay on track and flourish:
Find a good bookkeeper
A professional bookkeeper can train you on your software, answer any questions and fix any mistakes that might have been made. Ask for help when it comes to running your business in the best way possible. Your business can only benefit when your financial affairs are all in order.
Invest in technology
Accounting/bookkeeping software will make it easy to be efficient, accurate and up to date. More and more business owners are turning toward cloud software and other accounting solutions that allow them and their accountants to access financial information from any electronic device.
Keep personal and business finances separate
Never mix the two, it will make your accounting much more difficult to handle. It’s a lot easier to keep accurate records if there is only one type of account. There will not be any guessing as to whether it’s a personal or business expense. A lot of time will be saved by keeping these accounts separate.
Plan for major expenditure
Set aside money for major expenses like large stock purchases, office equipment and repairs and maintenance. By budgeting for these types of expenses, the funds will be available when you are ready not when you can afford it.
Set aside money for taxes
Setting aside money each month towards paying your businesses taxes will mean your ATO obligations will always be met on time.
Keep an eye on your Creditor Invoices
Late and unpaid bills can affect your businesses credit. Keep your bills organized and always pay on time. And if you can’t pay of time, keep an open line of communication with your vendors.
Reconcile bank accounts monthly
It is important to do bank reconciliations for all your bank accounts, credit cards and petty cash. You will have accurate and up to date information including profit and loss and be able to manage cash flow. Another reason is that it will cut down the amount of time needed by your external accountant in preparing your year-end figures for tax and statutory compliance.
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.
If cash is used, it is hard to keep track of spending. By using a debit or credit card you can keep track of amount spent, where it was spent and when it was spent. This makes tracking your expenses much, much easier.
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 could be easily accomplished in 30-90 minutes per week, especially if you are using an accounting system with quick entry fields and handy drop-down toolbars.
Regularly check up on your debtors
Make sure you stay on top of your accounts receivable so that you are receiving payments from clients when they are due. Regularly running an accounts receivable report and issuing monthly statements to clients will help you stay on top of monies that you are owed. It will also assist with your cash flow.
Good filing system
Maintaining a good filing system is imperative in keeping your paperwork organized. You will always be able to find ‘that piece of paper’ when you need it. Or go one step further and create an electronic filing system and do away with ‘that piece of paper’ altogether.
By keeping your records in check, you will be able to spend less time on business finances and more time on growing your business. For more information please contact us at firstname.lastname@example.org