To be truly successful, a business owner must have an overall accurate systemic recording plan and organization of their business’s financial transactions. Or, to put it simply… accurate bookkeeping. Bookkeeping is an essential part of a business’s success. Surprisingly, many business owners pile this responsibility upon themselves, rather than an accountant or bookkeeper. Not putting the necessary time and attention on the financial accounts of the business can make things complicated. Due to the owner’s responsibilities needed to keep the business flourishing, it is recommended to acquire an accountant or bookkeeper to provide your business with the most accurate business accounting results. However, we understand that as small business owners sometimes we need to get the job done ourselves! So, here are 6 essential tips to help improve your small business accounting results:
Plan for Major Expenses
The first thing to do as a business owner is to plan for major expenses. Planning for major expenses, like emergencies or paying closing costs, gives you the freedom and power of knowing how much money you have to spend on other resources needed for your business. More importantly, this will help you avoid borrowing loans for those new business opportunities when they do arise. Planning for these major expenses ahead of time gives you that extra security blanket. Ultimately, making your life less stressful during those stressful times.
When it comes to employee payroll, you should be going digital. Using a program that does all the math solving for you means there is less human error and makes entering data much quicker. Going online with your employee payroll process will only speed up your process and help avoid human error. We are working smarter, not harder! That means going digital.
Use Accounting Software
The age of paper invoices is coming to an end. It is time to update and integrate your business with an efficient and accurate software program. Using programs like QuickBooks or Wave Accounting will make your bookkeeping life easier and more efficient. To keep your finances organized, consider using one of the programs which best works for your business.
Review Books Weekly
Ignoring your expenses until absolutely necessary can be easy to do but damaging to your business accounting results. To make sure you are truly where you need to be in staying on top of your spending, you should review your books weekly. Putting aside time for this every week will provide you with more accuracy in how much money you have coming in and out of your business. Taking a few minutes to review your accounts payable and receivable every week will lift a large burden off your shoulders, and ultimately give you more stability and security in the business.
Separate Your Expenses
Separating personal expenses from business expenses is something many small business owners find as a challenge. To have accurate accounting records for your business, you need to make sure your personal payments are separate from the business account. You can do this by applying for a business credit card that is used exclusively for work. Once you have this, everything personal can remain on your own personal credit card. Making sure to not blur the lines between personal and business purchases will make your business’s accounting records more valid and reliable.
Bank Statement Cut-Offs
Another additional tip for improving your business accounting results is to request bank statements that have a month-end cutoff. When your bank statements have the same ending date you can review your data from matching time frames. Having this sort of detailed information will give you a better idea of the reasons and timing of your spending or receiving payments.
Bookkeeping is an essential part for a well-functioning business. If you are unable to hire an accountant or bookkeeper for your business, then it is up to you handle your small business accounts. Considering these 6 tips will help you keep your books reliable, detailed, and organized. Using tips like using accounting software, setting up a cutoff date for your bank statements, and reviewing the books weekly will help improve your business accounting results and keep your books from turning into chaos and mess over the years. Best bookkeeping!