Whether you own a small business or are self-employed, learning how to manage your books can be extremely daunting. Navigating the world of self-employment and business ownership isn’t easy, especially when you don’t have the funds to hire an accountant to take care of bookkeeping for you.
In the meantime, until you can hire a professional, you’ll need to do all of the heavy lifting on your own. So, here are some of the best bookkeeping tips so that you can keep your business’ finances in order.
5 Bookkeeping Tips
1. Separate Your Finances
One of the things you’ll want to do when managing your company’s finances is to keep them separate from your personal finances. While it may be easier to keep them combined, doing so creates all sorts of challenges for:
- Expenses tracking
- Accurate financial reporting
Separating these accounts makes bookkeeping much simpler. You’ll also have a more accurate view of how your company is performing financially, which allows you to make informed decisions.
2. Maintain Detailed Records
Be sure to keep all financial business records, including tax forms, expense reports, and invoices. Organize them in a way that makes sense for your needs. If you aren’t a fan of file cabinets full of paperwork, you can save time by scanning and digitizing them.
Keeping all of these records organized will make tax time a breeze.
3. Embrace Automation
Entering data manually into various spreadsheets is not only tedious, but it also creates the risk of human error. Wherever possible, use automation. These days there are all sorts of applications and bookkeeping software that can be used to simplify and speed up the process.
For added convenience, sync your bookkeeping software to your business bank account. This way you always have accurate and up-to-date records.
4. Conduct Quarterly Reviews
Bookkeeping isn’t a one-and-done process. To ensure that you’re on the right track, conduct a financial review each quarter. Use this time to take an in-depth look at your accounting and bookkeeping records.
Keep an eye out for trends, year-over-year revenues, and your sales numbers. It’s also important to track any increase in late-paying customers.
With this information, you can get a big picture view of how well your company is (or isn’t) doing. In turn, you can better plan for future capital needs.
5. Prioritize Accounts Receivable
As a small business, the odds are that you don’t have a lot of extra funds. This makes it even more important to keep a close eye on accounts receivable. When customers don’t pay on time, you can find yourself in a bad cash flow situation.
Make a note of when receivables are due and don’t hesitate to reach out to late-paying customers to encourage them to make a payment.
By using these bookkeeping tips, you can spend less time managing your business’ finances and more time growing your brand. In turn, you can pave your path to success so that one day, you can hand off bookkeeping to your very own accountant. Visit Satty, Levine & Ciacco, CPAs, P.C. website today to get started!