8 Bookkeeping Tips for Your Small Business
Are you looking for bookkeeping tips to help save you money and prepare for tax season? Then we’ve got you covered!
Accounting and bookkeeping are the most critical areas of business. Accurate bookkeeping helps you gain a complete understanding of how your business is operating and where to go in the future. Here are eight bookkeeping tips to help your small business prepare and succeed this year.
Find A Good Advisor
Having an advisor on the payroll to help you out is vital. An advisor will teach you how to handle your books properly, answer any questions and fix any mistakes made. There are many options for accountants that fit your budget and needs. In addition, an accounting major at your local college could use the experience and recommendation for their resume.
Keep Business and Personal Finances Separate
Another way to stay on top of your accounting and a great small business accounting tip is to separate your personal and business accounts. Essentially, open independent checking, savings, credit card, and other charges for your business. It will shield you from tax repercussions as you won’t purchase any personal items on your business accounts and vice versa.
A business credit card also comes with different benefits and rates of credit. Take advantage of those by getting cashback whenever you purchase items or accruing points and other ways. This can help you make payments on select items or maximize your dollar, letting you make money back on select purchases.
Use An Accounting Software
Whether you are a new small business or have been active for years, accounting software can help in many ways:
1. Choosing the right accounting software can help track online payments and in-store payments, as it automates the process of accounting for you.
2. Some software will provide financial reports to track growth and how well you are doing.
3. You have remote access to your financial records, even while away.
4. You can track all expenses and invoices to have all transactions located in one place.
So, even if you step away for a while, you can still keep track. You don’t want to ignore this small business accounting tip. It can help you pinpoint your weaknesses and strengths.
Set Aside Money for Taxes
If you regularly keep track of your financial records, you will be more prepared for year-end taxes. By setting aside money each month towards paying your small business taxes, you won’t have to cut back at the end of the year or get a loan to pay your taxes. Instead, you will already be prepared for it.
Track Your Invoices
Learning to create an invoice properly is one of the first steps to establishing credibility as a small business. Not only is it a great way to track expenses, but you are also establishing a paper trail should someone refuse to pay. Late and unpaid bills can and will affect your business’s credit and your tax payments. Keeping your accounts organized and always paying on time will help.
Remember to keep track of your receipts as well, just in case. It’s important to showcase that you follow the law regarding financial matters. In addition, invoicing companies help you stay on top of bills paid and who owes what to your company. If you have ongoing accounts, you must invoice them every month. Make details of how much they owe, their balance, and their previous payments.
Schedule Time to Go Over Your Books
Staying organized and informed is critical. One way to help with this is to schedule a time to review the books and look over your finances. A half an hour every week is an excellent start to help make sure everything is in order. This will give you a broad overview of your business every week, and everything will be organized when tax time rolls around.
Check-In On Accounts Receivable
When a client owes you money for services rendered, it isn’t the same as having that money in your account. Be sure to stay on top of your accounts receivable to get the monthly payments owed to you. Without receivables, your income dwindles. Regularly running accounts receivable reports will help you stay ahead of past-due amounts owed.
Hire an Accountant
Last but certainly not least, one of the most important things you can do for your accounting is to hire an accountant. You don’t have to hire someone full-time, and it’s probably best that you don’t. Instead, hire an accounting firm that can come in periodically and update your bookkeeping and accounting needs. They can help you map out financial projections, financial growth, and the status of your business.
They will also help you pinpoint weaknesses and areas for improvement. An accountant can simplify tax season and get your documents in order, or they can file on your behalf. This may be the best option for most small businesses, as you can maximize your deductions and keep money in your pocket.