As a small business owner, we know you might be responsible for several aspects of your business. You likely have to manage and oversee every part of the business much closer than owners with entire leadership teams. Improving your bookkeeping skills can go a long way to growing your business.
If you are handling everything, your business bookkeeping might be the most daunting of all your tasks. However, bookkeeping could arguably be essential to running a business.
If you fall behind in your books, you might have issues paying employees and keeping up to date with your accounts and taxes. Bookkeeping is a crucial part of your business. The first step to keeping your business steady is to improve your bookkeeping system.
In this blog post, we will discuss seven essential tips to help you with your bookkeeping who want to get your bookkeeping under control. By following these tips, you can make the process easier on yourself and avoid common mistakes.
Tip #01: Find a system that works for you
The first step to effective bookkeeping is creating a system that works for you. You need to find a method that is organized and easy to stick to. You can start with online spreadsheets and paper file folders, but investing in an online system is the best choice.
We suggest using QuickBooks online to help track your financial health better. Our team of professional bookkeepers uses QuickBooks for all of our clients. QuickBooks offers onsite training and provides material for self-teaching business owners. They offer a 30-day trial, with their most basic package only being $30 monthly.
Tip #02 Self-train whenever possible
There are a lot of terminologies, data entry, financial reporting, and tedious steps to ensure your books are in order. Stay up to date on things going on in finance. Staying up to date in tech could help as well. You also need to add this to your ongoing education and training in your industry.
We know it can get overwhelming, but refreshing yourself quarterly can help. Start by spending an hour or two quarterly researching your industry’s financial news. It might also help research tech around your business and your tools.
We mentioned in the last section that QuickBooks offers training material, and we suggest refreshing your knowledge regularly and reviewing pieces of training you’ve finished.
Tip #03 stay ahead of things
Bookkeeping is the number one thing you don’t want to put off until later. You must regularly schedule times to sit down and work on each bookkeeping task. That includes managing accounts payable and accounts receivable, taxes, payroll, and other basic bookkeeping tasks. Don’t just set aside “bookkeeping time.” Set aside time for each job.
If anything is off or needs to be adjusted, you can easily and quickly find errors to improve your profits. The more you follow a set calendar and to-do list, the easier it’ll be to improve your bookkeeping skills.
Tip #04 make sure you have a paper trail
It can seem so convenient to keep everything on your digital platforms. You might also feel good about saving a tree but trust us; you’ll want paper copies. Get binders and a label maker and organize paper copies of your income and expenses. Keep all receipts, print off all-electric ones, keep paper invoices, and print off any other important papers for your bookkeeping.
If anything happens to your electronic devices, you’ll have paper copies of your financial information organized and ready to go. You might also experience tax or legal issues where you need your files. If you’re doing your bookkeeping, storing all that information on your devices might also be problematic.
It’s important to keep old records. For example, tax information for your business needs to be kept for at least seven years. Check out this article for other essential tax papers and how long to support them. Making paper copies of these forms may be easier than relying on your device storage.
Tip #05 regularly check your books and make adjustments
The best part about following the tips above is that you can easily see where to make adjustments. Keeping up-to-date books will make tracking your profits and loss much more efficient. If you regularly check the books, you will find room for improvement.
You can easily see where money might be wasted or where resources might be better allocated. Continuously checking your books will ensure you’re getting the total return on profit on all of your products or services. You can find issues as soon as they arise or maybe discover a way to cut your losses by examining your books regularly and adjusting your company spending.
Tip #06 Set money aside for taxes
When it comes to your business taxes, a lot is out of your control. It might be challenging to figure out how much you’ll need to pay before you get your return. If you have money already set aside, then the shock of taxes won’t be as rough on your business bank accounts.
Tip # 07 Hire a professional
If you follow all the tips to improve your bookkeeping skills but still feel like you’re drowning in a sea of numbers, get help. You don’t have to water in your bookkeeping and taxes. It might be time to consider hiring a bookkeeper or, even better, a certified public accountant.
Hiring a CPA can help you ensure you not only have someone focused on the books, but they are fully trained and accredited. Hiring a CPA can also lead to fewer issues during tax season, as they’ll most likely be comfortable filing taxes for your company. CPAs are a great option if you have the resources for them.
Here at Cultural Impact, we offer bookkeeping and tax services, so you might consider contacting us if you need extra help.