If you’re a small business owner, you’ve probably heard the term “bookkeeping” before and had no idea what it meant. Bookkeeping is keeping track of your business’s financial records—and that’s it. It’s not scary!
What does bookkeeping have to do with a small business? Many business owners don’t realize that their accounting records need to be in great shape for their company to progress. The business owner should ensure this. Most small businesses rely on reviewing bookkeeping data and documents to help them formulate their marketing plans.
Quick Bookkeeping Tips for Small Business
Your business will find itself facing bookkeeping problems at one point or another. Whether the issue is something you would like to fix immediately, or if it is something you have been delaying for some time, now is the time to act. So what’s the best way to do it? How can you positively deal with the issues in your business and ensure your costs are as low as possible?
Here are the top five easy tips for keeping track of your business’s finances:
Maintain a separate bank account for your business.
It will help you track all transactions without mixing them with personal accounts, making monitoring your income and expenses more manageable. It also provides tracking payments made directly from this account and those made indirectly through credit cards or checks written on the account.
Pay attention to cash flow.
You must keep enough amount of cash on hand to cover expenses and payroll as they arise—don’t wait until the end of the month!
Set up an invoice system so clients can submit bills electronically instead of by mail or fax (which requires manual entry).
It will make it easier for clients because they won’t have to wait for a check or money order; they’ll pay online with their credit card or PayPal account. It will make things easier for you by eliminating the need for manual entry into an Excel spreadsheet or other accounting program—not only does it reduce errors, but it means no more lost receipts!
Use software programs like QuickBooks as much as possible.
It will help you track all your financial transactions automatically, instead of doing it by hand every month or so. If you don’t want any extra cost or hassle associated with this program (or if you’re not tech-savvy enough), other options are also available—like Google Sheets! So there’s even a free option if all else fails!
Get into a routine.
Make sure to get some system going so that every month (or quarter) starts with everything in order before any bills come due or other expenses need paying out from profits made over those previous months/quarters.
As a small business owner, you can quickly start in the red. Keeping things organized and staying on top of your finances is hard enough, and these bookkeeping tips can help prevent you from getting overwhelmed. It’s not a lot of time needed, but it pays enormous dividends and makes it a little easier to handle the pressures of running your own small business, especially regarding taxes.