As a small business owner, you have to take your accounting operations very seriously otherwise; your chances of growth will keep on diminishing. Accounting practices such as bookkeeping is one of the most important parts of any small business as, without proper bookkeeping, no business will be aware of its current financial health and without any information about the current financial health, most of the decisions will go wrong for the company.
You should know that most of the business that didn’t take bookkeeping seriously and didn’t update it regularly, suffered huge losses and ended up into a disaster. It doesn’t matter how small your business is, you should always make sure that your books are being updated on a regular basis and readily available as well. If you have maintained your books properly then the business analysis will also become a lot easier for you. So, in this blog post, we will be looking at the top 5 bookkeeping tips for small businesses in order to maintain the operation and maximize the chances of growth.
Automate
You should know that entering data into a spreadsheet and then reconciling numbers is not the right way to move forward with your bookkeeping practice as such an old school method of bookkeeping can increase errors, make you less productive and in the long run become a hassle for you. You should always use cloud-based accounting software like QuickBooks hosting in order to update your books as these cloud accounting solutions automate most of your bookkeeping operations and thus you become quick, accurate and productive.
Plan for Quarterly Reviews
A quarterly review of your books will help you to keep things managed. At the end of every year, you should take an in-depth look at your books and other accounting records. You can analyze your books and other accounting records for trends like increase or drop in sales, revenue per year, or increase in the number of late-paying customers. You should always consult your accountant to know the trends through your books because an accountant will help you to look at the bigger picture. Using the help of trends and a bigger picture of your accounts, you will be able to easily plan for future capital investments.
Track Performance Against Your Plan
You should know that bookkeeping is one of the most useful tools to track your performance against your plan. Designing a financial budget and then tracking the monthly process against the plan should be one of your main priorities of bookkeeping practice. A good bookkeeping practice will not only help you to know what you have done but it will also help you to know how your business is performing. You can easily consult your CPA/QuickBooks ProAdvisors or bookkeeping services and sit with them in order to design a financial budget and revenue forecast. After that, you can compare your results against the budget and then use the same information to streamline your company.
Always Keep Your Personal Finance Separate
One of the biggest mistakes in bookkeeping is mixing personal finance with business finance. You should always keep your personal finance separate from your business finance in order to make things easier for you. You should have a separate account and credit cards for your business because mixing everything will make things complicated and the result will not be good. Keeping separate finances, you will be able to save both time and energy while shifting through expenses since you will not have to filter out any personal expenses you have made.
Keep Tax Deadlines in Mind
In order to avoid any type of problem, you should always prepare ahead of time and set aside money for any type of anticipated tax bills. If you don’t want to pay fines and penalties then you should always file taxes on time and that’s why it’s necessary to keep an eye on the deadline and work accordingly. If you have updated your book regularly and maintained it well throughout the year, then filing tax before the deadline won’t be an issue for you.
If you are running a small business and you use the above-mentioned tips and stay ahead of time. Alongside proper bookkeeping, you will face fewer obstacles and be quick, accurate, productive and effective.
About the Author
Kashyapi has been involved in the world of accounting software, SEO and cloud computing from a very long time and currently, he is working as a lead content writer with MyQBHost, a QuickBooks hosting company. Cloud computing and SEO is what she eats and drinks.
