You can use these small business bookkeeping tips to manage your day-to-day accounts and office tasks. You will learn how to do bookkeeping with these tips and be better able to operate your business.
Separate your personal and business banking
To keep business funds separate from personal funds, new business owners must open a new business bank account as soon as possible. Ideally, the new account should have online access. Processing business expenses in the business bookkeeping is a waste of time. Having personal expenses mixed into your accounts with a bookkeeper is even worse…
If they are mixed up with business transactions, they will need to be processed. To enter them, they must be coded to drawings in the bookkeeping system, taking up valuable time that could be spent entering business information.
To avoid the bookkeeper from having to deal with a million small personal transactions and making you pay for their time, if you need to use business money for personal expenses, you should do a bulk transfer to your personal account on a regular basis, such as once a week.
Organize Your Business Documentation
Documenting all business transactions is a top priority. Accounting source documents are called accounting source documents. Keeping them allows you to:
- Easy tracking for any future queries that might pop up, and
- Proof (to an auditor or tax man) of what occurred.
Tax departments typically require businesses to keep the documents that back up their tax claims for a minimum of five and often seven years. Documents such as invoices, receipts, wage records, etc. Find out how long your local tax department keeps records by doing an internet search for it. It is only possible to keep the records if they are filed and archived in a very logical manner. A box or basket full of papers arranged randomly makes it difficult to find what one needs, not to mention frustrating.
Learn to Understand Monthly Bookkeeping Reports
It is surprising how many business owners do not know if what they are doing is working until it is too late, i.e. when they suddenly find themselves in debt and with no money. By keeping your bookkeeping system updated and producing reports once a month, you can avoid this scenario. Learn how to read and understand those reports. If you want to own and run a business, you can’t ignore this factor. The income statement and balance sheet are the two most important reports to begin with.
Outsource Your Bookkeeping When it becomes too hard to handle
Business owners who double as office administrators and bookkeepers and struggle with bookkeeping or do not have enough time can outsource the whole thing.
- Cost Effective : Because you only need to pay for a couple of hours of work a month opposed to paying a regular wage, and
- Accuracy : You are getting that necessary professional work done on your accounts so you can be confident they are correct.
Professional bookkeepers can prepare monthly reports quickly after processing bank transactions, reconciling accounts, and compiling reports. Whatever amount of work you need done can be outsourced.
The great thing about experienced professional bookkeepers is that they are usually in a position to give you great business advice over and above your day to day bookkeeping needs such as :-
- Investigate new software and advise if any are a good fit for your business
- Attend business meetings with you and your banker and help explain the accounts to the banker if you find it a little difficult
- Help prepare your annual budget and cash flow reports
- Train your office employees
- And much more