Did you know that more than 40% of business owners say that keeping up with their bookkeeping and accounting is the worst part of owning and operating a business? At least you know you’re not alone, but bookkeeping is essential if you want to keep your business running well.
While you can always outsource the task to an experienced accountant, you might not have enough room in your budget.
If you’re stuck managing your own bookkeeping, don’t panic. Here are a few bookkeeping tips to help you stay on top of your finances and keep your business in the black.
1. Separate Business and Personal Expenses
One of the most important things you can do for your small business is to separate your business and personal expenses. Mingling your personal and business finances can make filing your taxes harder and may keep you from being able to claim valuable tax deductions at the end of the year.
Open a dedicated business checking account and use it to cover all of your business’s expenses. Avoid paying for personal items with your business’s funds or covering business expenses with your personal credit card.
2. Keep Track of Everything You Can
When it comes to small business bookkeeping, there’s no such thing as too much information. Start documenting everything you can.
If you make purchases, save the receipts. If you have late invoices, keep track of which ones are still outstanding. If you have employees, keep track of how much you’re paying them, the taxes you’re withholding from their wages, and any taxes withheld from their paychecks.
You can save physical copies of all the necessary documents. However, it’s often easier to scan physical copies into your computer and store them in the cloud.
3. Create and Send Invoices Quickly
Any delay in receiving payment for your services means a dip in your company’s cash flow. Get in the habit of creating and sending invoices as soon as you render services to a customer.
You can streamline the process by using an invoice template to help you batch create invoices for different customers. Just make sure you include your contact information, logo, and an itemized list of the services you provided for each invoice so customers can pay you properly.
Keep track of both your paid and unpaid invoices. If any customers are late, follow up with them and make sure they received the invoice in the first place. Often, customers will pay when they realize that you know they’re late.
Keep These Small Business Bookkeeping Tips in Mind
Staying on top of your business finances and bookkeeping efforts is the best way to set your business up for long-term success. Follow these proven bookkeeping tips and you’ll know exactly where your business stands each quarter.
Proper bookkeeping is only one part of running a successful business. Check out our latest posts for more tips to help you streamline your processes and improve your profits year over year.