Eight Essential Tips for Successful Bookkeeping
Bookkeeping can be a daunting task for small business owners and take them away from their zone of genius. Here are eight things to keep in mind as you work in your books.
- Not “working” on your books until they are overwhelming. If you put off doing anything it can become a mountain too high to climb when you do get to it. Like not doing laundry for a month and then having to tackle the pile. To combat this problem, set aside a time on your calendar each week to look at your books. Thirty minutes each week can keep you up to date and avoid the overwhelm
- When you do not keep your personal and business transactions separate you run the risk of not capturing the true cost of your business and the deductions you can use when tax time comes. Draw a line in the sand and commit to separate bank and credit cards and then be sure you know which one you are using before you purchase something.
3. How often do you reconcile your books? When reconciliations are not done, there is no real way to be sure what you think you have is really what you have. Put time on your calendar each month to reconcile all your accounts, this way you can catch errors and be sure your records match the banks.
4. Small expenses may not seem like they are worth recording, but all those small things can add up to big deductions when it comes to tax time. There is no reason not to keep track of expenses even when they may seem insignificant.
5. Classifying income and expenses in the correct categories can help you understand where your money is coming from and what you are spending it on. Having a well-defined chart of accounts and services helps you better analyze your numbers and make informed decision about your business
6. What is your back up plan for when your computer dies and your data is unretrievable? Make sure you have a regularly scheduled backup planned for your finances so if the unthinkable occurs you are prepared to keep moving forward.
7. Even in the digital age, having documentation for expenses is critical, and being able to find them important. Have a system in place to capture and organize receipts, invoices and financial documents (like bank statements)
8. Make sure you don’t wait to get professional help for your financial needs and do not attempt complex financial tasks without it. Trying to do things on your own could cost you more than hiring a professional to start with. Like trying to fix the leak yourself and ending up with a flooded house. Make the call instead of trying to save a few dollars only to have to spend thousands.
Ready to take bookkeeping off your plate forever? Book a free consultation with me now!
Book with us Today!