Tips to Keep Business Bookkeeping Simple

When you run a small business it’s easy to become overwhelmed when you have to do everything yourself, particularly the bookkeeping. It’s vital to keep accurate records that will help you maintain your day-to-day accounts and plan for the future. Below are a few tips to keep your bookkeeping simple, and help save you time that can be spent elsewhere on your business.

 

Automate What You Can

Automating where you can will save you time, allows you to work smarter and not harder, increases efficiency, and minimizes errors that cause you to spend even more time trying to find and fix them. Saving time allows you to focus your attention elsewhere in the running of the business, or even enables you to enjoy more personal time. A few areas to automate include bill reminders and payments, payroll, and recurring customer invoices.

 

Budget Quarterly

While larger businesses may operate on an annual budget, it’s often better for small businesses to maintain a monthly or quarterly budget. Take a look at your forecasted sales, which provides information on your incoming funds and where you can divert cash as needed. You should also look at what sales were like at the same time last year, and account for seasonality. You should also review and analyze variable and fixed expenses and account for any significant changes, such as hiring new employees.

 

Keep Good Records

It’s imperative to keep good records while operating your small business. Not only does keeping organized and accurate records help you when reviewing your quarterly budget, but it also helps you keep track of all the expenses you’re allowed to deduct from your taxable income. One method of keeping track of expenses is to digitize your receipts and sort them by category or expense.

 

Plan For Expenses

Nothing lasts forever, which is why you need to plan for equipment maintenance, repairs or replacement, large inventory orders, or other expensive purchases. When you plan for a significant expense, you can cover it without stressing about how you’re going to find the cash.

 

Separate Personal And Business Finances

While you might find it easy to use the same account for your personal and business expenses, opening a new bank account for your business is better. Not only would you have to do double the work to separate business from personal, but you and your business have different tax liabilities.  Keep everything separate!

 

Track Cash Payments

Not tracking cash payments puts your business at risk. Not only may the IRS penalize you for missing or improperly reporting transactions, but it puts your business at risk if a customer pays in cash and it’s not recorded.  Track every transaction.

 

Outsource Bookkeeping

The best thing about operating your business yourself is that you don’t have to do it alone. You might be the only employee, but that doesn’t mean you have to do everything yourself. When you outsource your bookkeeping, you’re choosing a cost-effective option as you’re only paying a professional a few hours a month to provide accurate results, and you have someone who can advise you on the state of your business finances.

 

Bookkeeping doesn’t have to be a difficult or daunting process in your business, especially if you have someone doing it for you. Taurus CPA Solutions is a full-service accounting, tax, and consulting firm designed to take the fear out of finances. If you’re ready to make your business bookkeeping easier, reach out to us by filling out our online form.