7 Tips For Maintaining Financial Records As a Small Business Owner
It’s tough to get financial records organized when you are a small business owner. There are so many different things to keep track of, and it’s easy for paper trails to get lost or misplaced. Financial records include things like budgets and income statements, but also smaller things like receipts and invoices.
How A Small Business Owner Can Keep Better Records
As a small business owner, you know that keeping accurate financial records is essential. But with so much to do and so little time to do it, it can sometimes feel like an impossible task. Here are seven tips for maintaining your financial records:
Keep track of all your transactions.
Keeping good records is the most important thing you can do as a small business owner. This means keeping track of all your transactions, including credit card payments and deposits made into your bank account. The best way to do this is by using online accounting software like QuickBooks or FreshBooks.
Set up a filing system that works for you and your business—and stick to it.
The most important thing is that you have a system in place that works for both your business and your personality. If an organizational system doesn’t feel natural and intuitive to you, it won’t work. Whether you use a computer program or keep it all in your head, make sure that you have some kind of system in place. Once you have a system in place, make sure that it’s easy to use and update regularly.
Track expenses by category
It will give you an idea of where all your money goes each month so that you can make adjustments as needed—and it’ll also make tax time easier since everything will be categorized by type (and thus easier to file). Every time you pay for something related to your business—from postage stamps to office supplies—make sure it gets logged into your account book or accounting software as an expense. This will help avoid any confusion later on when it comes time to tally up your profits and losses at the end of the year.
Keep receipts and invoices.
Save all of your receipts, invoices, and other business-related documents in a folder or box that is easily accessible so you can refer back to them later if necessary.
Make sure you are using the right tools.
You don’t have to be a professional accountant to maintain your books—but you do need the right tools. The best way to make sure that you can keep track of all the documents related to your business is by using software like Quickbooks, which allows you to create invoices and manage payroll, among other tasks.
Set aside time on a regular basis to review your books.
Reviewing your books regularly will help you stay on top of any issues before they become too big to handle. It will help you keep track of trends in your spending and help you make sure that you aren’t wasting money on things that aren’t really important to you. It allows you to make sure that you’re making good decisions with your money.
Hire an accountant for your tax preparation.
Taxes are complicated especially for a small business owner, and when you don’t have someone who knows what they’re doing working on them for you, things can go awry really quickly! But when you hire an accountant, he or she will make sure every dollar is accounted for and all of your investment income is properly reported—and he or she will do it so quickly that you won’t have time to worry about anything else in your life. So don’t put off hiring an accountant until next year—do it now.
If you’re a small business owner and you haven’t started keeping financial records, at this point, it’s hard to get started. However, even if you’ve already begun filing your records, you do have options: it isn’t too late to change the way that you keep your books. So don’t worry, and don’t put off taking care of any existing financial records. Simply start working from here—and very soon, you’ll be able to enjoy all of the benefits of doing your own bookkeeping.