Small business bookkeeping is a topic that shouldn’t only be addressed during tax time. By taking an all seasons approach to the subject, it becomes even easier to keep the finances of a business organized and focus on the money making part rather than the money organizing part. If you’re just getting started when it comes to running a company, the idea of handling your company’s financial books may seem daunting right now. Fear not — this article will lay the 3 basic steps you need to take in order to make sure your business’s bookkeeping duties are performed perfectly.
The first step is to be consistent. You want to make sure that if you set up your accounting system, you do it the same way every month. Even moving a set of columns around can cause your system to suffer problems that are highly unnecessary. There’s a lot of programs to help you handle your bookkeeping duties if you do not wish to hire outside help to take care of this. The hidden benefit of staying organized is that is you do decide to hire someone else to come in and take care of your bookkeeping, they will be pleased to be handed a neat and orderly system.
The second step is to keep good records. Many businesses miss out on great tax benefits every year merely because there’s no record to back up the deductions that they deserve. If there’s ever any issue over profits and expenses, having a solid small business bookkeeping system in place makes showing true profits and loss a breeze. One high tech way of making sure receipts are always kept and organized is to use a scanner to scan in all the receipts. There are even specialty scanners in place now that can handle many receipts at once and even automatically file them into a specific folder.
The third step is to maintain invoice integrity. The concept of invoice integrity is simple — if there’s an open invoice floating around, it needs to be accounted for and closed in a timely fashion. The biggest frustration of small business bookkeeping is often that invoices can take a long time to get filled and thus bring money back into the company to handle expenses and fund future projects. This step is so crucial that it may even lead to your bookkeeping system influencing corporate policy on exactly how and when invoices must be paid. For example, you can outline a policy where all invoices must be paid within 15 days of being sent out or there will be a late fee or other penalty. This usually encourages people to pay on time to avoid additional fees and charges.
Overall, the world of small business is challenging, but having the right system in place makes tackling the obstacles a lot easier. There’s plenty of ways to handle your small business finances, but these tips should lead you in direction that’s right for you and your business with no trouble!