As a small business owner, it’s critical that you are involved in the financial management of your business. Bookkeeping is more than a necessary evil. An accurate, robust accounting system is invaluable.
You don’t need to do the bookkeeping yourself, but you need to understand how to organise your business to make the bookkeeping more efficient and accurate.
Top 10 Bookkeeping and Accounting Tips
Keep Business and Personal Finances Separate
By eliminating all personal transactions from your business accounts, you will greatly reduce the number of transactions your bookkeeper must categorise and reconcile. Processing transactions for your personal expenses within the bookkeeping of your business can be a waste of precious time.
Go Paperless by Using Cloud-Based Accounting
Most accounting software will provide all the basic functions needed for any type of business bookkeeping – one of the most popular on the market right now is Xero. Look for packages made for small business owners because they streamline the process by providing basic templates for your business, like invoices, deposit slips, and business account cheque printing. With the addition of cloud-based accounting systems, you can access your business information from anywhere.
Plan for Major Expenses
Set aside money for major expenses like inventory, office supplies, repairs and maintenance. By budgeting for your business in the coming years, you can save a lot of worry about dealing with these expenses in the future.
Set Aside Money for Taxes
If you keep track of your financial records properly you can be prepared for year-end taxes. Setting aside a little bit of money each month towards paying your taxes means you won’t have to cut back at the end of the year, you will already be prepared. Don’t forget to speak with your Accountant about Tax Planning before June 30 every year to make sure you don’t get any nasty surprises come tax time.
Keep an Eye on Your Invoices
Late and unpaid bills can affect your businesses credit and affect your tax payments as well. Keep your bills organized and always pay on time
Check-In Monthly on Your Accounts Receivable
Having a client owe you money for services, especially at the end of the year, isn’t the same as having that money in your business account. Make sure you stay on top of your accounts receivable so that you are getting all the monthly payments you are owed. Without receivables, income dwindles.
Use Receipt Bank
Receipt Bank enables you to capture an image of your receipts and input the extracted data into your bookkeeping software. You never need to worry about losing a receipt again or losing out on claiming expenses!
Get Bank Feeds
Bank feeds automatically import transactions from your bank or financial institution directly into your Xero organisation, eliminating the need to import transactions manually. How easy does that sound?
Automate whenever possible
Talking of automation, make sure you’re automating whenever possible. Recurring invoices, payment reminders, receipts, transaction matching – are all things you can set up in your software, to help make your bookkeeping easier for you.
Know when it’s time to outsource your bookkeeping
Not everyone is great with figures and it’s no different with your business bookkeeping. If it’s always hectic, overwhelming, takes up too much of your time, or becomes too difficult for you, look into outsourcing it. If it’s causing your stress or leaving you overwhelmed, look at the services we provide and know that, if you outsource it, not only will the task get done, but it will free up your time and lower those stress levels!
Bookkeeping is one of those tasks that’s essential for your business but often pre-empted with dread. However, it doesn’t have to be that way. Cloud-based bookkeeping software can help make it a lot easier and faster to action, plus the tips above will help keep you on top of your finances.
The Money Edge | Bundaberg