Starting your own business is a dream come true for entrepreneurs. You’ve created your business plan, got all your ducks in a row, and are ready to tackle the next challenge.
There are plenty of ways for small businesses to make their bookkeeping more simple and more efficient. Most business owners can agree that getting over this initial hurdle can take time, dedication, and great tips!
That’s why we’ve compiled these 10 bookkeeping tips for small businesses. We’ll give you the best tips you need to simplify your bookkeeping process so you can use your time as productively as possible.
Let’s dive right into the 10 bookkeeping tips for small businesses!
Related: Why Outsource Your Bookkeeping
- Don’t Mix Business and Personal Finances
Using your personal account for your business is one of the most common mistakes a small business owner can make. There are plenty of reasons to open a business account as soon as you launch your business.
Having a specific business account will make things much easier for you to pay quarterly taxes. Instead of going through your bank statements line by line to determine how much money you earned and spent for the business, it’ll all be on its own account, saving you precious time.
Another reason to have a separate business account is it helps legitimatize your business. Whether you’re starting a tech company or have a well-performing Etsy shop, using a bank account with your business’s name will help your customers trust the legitimacy of your business.
Related: Why Should You Use K9 Bookkeeping?
- Use Bookkeeping Software
Trying to keep up with a spreadsheet or written notes is a recipe for disaster for small businesses. The risk of losing crucial financial data is too great and takes too much time. Using bookkeeping software will allow you to automate so much of the process.
Finding the right bookkeeping software will make your life so much easier. Most software even allows you to sync your business bank account to it, so you’ll always have accurate, up-to-date data.
- Outsource Your Bookkeeping
As your business expands, you’ll begin outsourcing more tasks. Outsourcing your bookkeeping is a great option when you don’t want to deal with keeping track of everything yourself. It can be challenging to keep up with your finances as your business expands, and no software will be as good as a trained professional.
Outsourcing your bookkeeping will be a (small) expense, but will save you time and money in the long run. This is an excellent option for small businesses that don’t have the time to devote to bookkeeping themselves or for those who expect their business to expand quickly.
Related: What is an Outsourced CFO?
- Keep Your Business Documents Organized
Keeping your business documents organized is essential for protecting your small business. Having organized records for your business will help you during tax time and if your business is ever audited.
The paperwork side of things isn’t always the most exciting part of owning a small business, but it needs to be kept up. Whether you go with an organized filing system in your office or electronic storage, you must have a consistent system in place that keeps everything organized.
Are you a small business owner who needs help with your bookkeeping? Head on over to K9 Bookkeeping to talk to a trained professional today!
- Stay On Top of Tax Deadlines
As a small business, you’re expected to pay your taxes quarterly. It’s essential to keep up on this, or you risk your business being investigated by the IRS for tax evasion or other inquiries.
Keeping your bookkeeping records up to date and well-organized will help you when it’s time to pay taxes. Most bookkeeping software, or bookkeepers if you plan on outsourcing, will be able to help you do your taxes on time.
- Review Monthly Bookkeeping Reports
Some small businesses make the mistake of only reviewing their bookkeeping reports every quarter. Reviewing your bookkeeping reports every month allows you to adjust your business practices before a decline in sales becomes a huge financial issue.
- Keep Track of Cash Payments
With most payments being made electronically, any cash payment you receive is easy to forget about. It’s important to make sure you include any cash payments in your bookkeeping system.
Not reporting cash payments can be a red flag for the IRS, and no one wants that. Make sure to report any money earned in cash in your bookkeeping system.
- Use Time Tracking Software For Employees
There is plenty of time-tracking software available. This can save you and your employees the headache of manually keeping track of hours, overtime, PTO, etc.
Most time tracking software has the option of syncing with your bookkeeping software, which makes the whole process even easier! Payroll will become more simplified this way as well.
- Track Your Business Expenses
Businesses can deduct certain expenses from their taxes, but these regulations change based on which state you’re operating in and the size of your business.
Keeping track of all your business expenses will make it easier for you to highlight which costs can be deducted at tax time. It will also make it easier to catch any irregularities and help you identify where your business expenses can be lessened.
- Manage Your Invoices
Keeping on top of your invoices is an absolute necessity. Customers don’t want to wait and wonder where the bill is, which can wreak havoc in your bookkeeping system if your invoices are constantly delayed.
Make sure you have a consistent system in place that manages the creation of invoices and sends them in a timely manner. Your bookkeeper, or software, will thank you for ensuring things are running smoothly!
We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on bookkeeping, to ensure your business is financially sound and ready to grow to the next level.
Running a business is hard work, bookkeeping shouldn’t be.
Let our team of professional bookkeepers take care of your books and receive accurate, detailed reports every month. Our team of experts is laser-focused on the latest trends and premier customer satisfaction, so you can always be sure you’re getting the best care and service. Your personal account manager will focus on handling your books, leaving you to focus on growing your business and leading it forward.
Click here to schedule a FREE consultation to join the hundreds of business owners already working with K9 Bookkeeping to help their businesses grow.
