Top 10 Bookkeeping tips for small business
It's easy to become overwhelmed with keeping your accounts up to date when you're busy running the day to day operation of your business, that's why we've put together these 'Top -10' tips that will help get your systems back on track and keep your business running smoothly behind the scenes.
1. Separate business and personal finances.
Co-mingling expenses and income is a common mistake in small business bookkeeping—and one that will cause huge headaches for your business in the future. Open a business bank account as soon as you decide to go through with your start-up, and get a separate business bank card. This not only separates your accounts, but also helps your business build its own credit rating.
2. Ask a pro.
Talk to your accountant to figure out if you can use off-the-shelf accounting software such as Xero or QuickBooks. Your accountant will be able to not only offer advice but also set up the software for you and show you how to use it.
3. Automate whatever you can.
Entering data into spreadsheets and reconciling numbers manually is so old school. Use cloud-based bookkeeping software, and do your business banking online. That way, you can sync your bookkeeping software with your business bank account so you always have accurate, up-to-the-minute records. Plus, with the cloud, your critical financial data is backed up safely.
4. Perform regular financial check-ups.
If you put off bookkeeping too long, you end up with overdue invoices or figures that don’t add up. Go over your books weekly to make sure everything is kept on track.
5. Do a quarterly review.
At the end of each quarter, take an in-depth look at your bookkeeping and accounting records. Look for trends, such as growing or declining sales, year-over-year revenues, or an increase in late-paying customers. Talk to your accountant: He or she can help you look at the big picture so you’re better prepared for future capital needs such as buying new equipment or other required business investments.
6. Keep records of business expenses.
Consult your accountant for guidance on what kind of expenses you can deduct in your business. For anything you think you’ll be claiming, maintain detailed records; save time by scanning and digitising receipts. You can also simplify expense tracking by always using a business bank card for business purchases.
7. Monitor your employees’ hours with time tracking software.
Cloud-based time tracking software allows employees to clock in and out on their smartphones, tablets or computers. But it doesn’t just save them hassles—it also makes your life easier by automatically tracking overtime etc. You can find time tracking software designed for just about any industry. Choose one that works with your bookkeeping software, and payroll, helping to streamline admin within your business .
8. Keep a close eye on accounts receivable.
When customers don’t pay on time, your business’s cash flow can dry up fast. Pay attention to when your receivables are due and contact late-paying customers right away to nudge them along. Even if a customer is having financial problems, you may be able to set up a payment plan to get at least some of what you’re owed.
9. Stay on top of tax deadlines.
To avoid getting caught short, plan ahead and set aside money for any anticipated tax bills. Pay on time so you don’t face fines. Set reminders in your calendar a week or two before a payment is due.
10. Never be scared to ask for help or advice
If there’s something you’re unsure of regarding your bookkeeping or accounts then do not hesitate to reach out to your accountant for advice, there’s almost nothing that they won’t have seen or been asked by a client before and asking the question can save you a lot of time and help to keep things on track. Remember your accountant is there to support you and your business to succeed.
If you require any help navigating your way through this then please do get in touch, we are here to help.
Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.