These are 9 ways to simplify bookkeeping for small businesses.
1. Separate personal and business finances.
In small business bookkeeping, it is common to mix income and expenses. This can lead to major headaches in the long-term. When you are ready to start your business, open a business bank account and apply for a business credit card. This will not only help you separate your accounts but it also allows your business to build its credit rating. Kaizen-Life believes in providing outstanding service with a side-of-fun – we want to develop a relationship with our clients! It can be difficult to find a trustworthy bookkeeper (who still has a personality), so we work with you to create a safe environment of confidentiality and collaboration.
2. Automate everything you can.
It is no longer a good idea to manually reconcile numbers and enter data into spreadsheets. Cloud-based bookkeeping software allows you to do your business banking online. You can also sync your cloud-based bookkeeping software with your bank account to ensure you have up-to-date records. Your financial data can be safely backed up off-site with the cloud.
3. Ask a professional.
Talk to your accountant about whether you are able to use pre-made accounting software or if it would be more beneficial to customize it. Your accountant will be able not only to offer advice, but also to set it up for you and teach you how to use it.
4. Perform regular financial checkups.
Bookkeeping can be a chore if you delay it too long. You may end up with bounced checks or overdue invoices, and figures that aren’t adding up. To ensure everything is in order, you should review your books every week.
5. Do a quarterly review.
Take a close look at your accounting and bookkeeping records at the end of every quarter. You should look for trends such as a rise or decline in sales, year-over–year revenues or an increase of late-paying clients. Talk to your accountant. He or she will help you see the bigger picture and prepare you for future capital requirements such as moving to a larger location or purchasing new equipment.
6. Keep track of all business expenses.
There were so many tax code changes made in 2018, that it is worth consulting your accountant to determine what expenses you can deduct next fiscal year. Keep detailed records for everything you plan to claim. You can also save time and money by scanning receipts and digitizing them. A business credit card can be used for purchases in business. This will simplify the expense tracking process.
7. Time tracking software allows you to monitor the hours of your employees.
Cloud-based time tracking software lets employees clock in and out from their smartphones, tablets, or computers. It doesn’t just save employees time, but it also simplifies your life by automatically tracking overtime and PTO. There are time tracking software that can be used in any industry. You can make payroll easy by choosing one that integrates with your bookkeeping software.
8. Pay attention to accounts receivable.
Your business’ cash flow can quickly dry up if customers are late paying. To encourage customers to pay on time, be aware of when receivables are due. You may be able set up a payment plan for customers who are having financial difficulties.
9. Keep on top of tax deadlines
Avoid getting caught short by planning ahead. Make sure to save money for tax bills. You won’t be fined if you pay on time. The IRS tax calendar for business can be synced with your cloud-based calendar to ensure you don’t miss any deadlines. It can even send reminders up to a week before the payment is due.