7 Essential Bookkeeping Tips for Your Business
If you have recently started your new small business, you may have realised that the beginning stages are not as easy as you might expect. From hiring employees to managing your finances, there are just many processes that you might not be able to handle by yourself. However, when it comes to managing your books, you may not find the need yet to hire a bookkeeper because you may not have a big budget.
In this article, we will share seven tips on how you can best manage your business's books:
Organise your finances
Before you start with your business bookkeeping, make sure to sort them out first. This is because you don’t want your personal finances mingling with your business' expenses. When you want to sort out your finances effectively, it is best that you open a separate business and personal bank account. Moreover, make sure you have separate credit cards as you aim to build your own credit rating should you need to take out loans or open up your business to investors.
Use automation tools
Although spreadsheets have been widely used over the years, they have become a thing of the past when it comes to bookkeeping. Instead, you can now invest in reliable cloud-based software and have an online banking setup for your business. This way, you can sync your financial data with your business bank account for a reliable record.
Consult with an expert in the field
If you have no plans yet to hire a bookkeeper, you can always consult with one. When you take the time to consult with a professional, they will help you figure out your business finances and which software you should use. Over time, these small steps that you take will ensure that your bookkeeping processes are done well.
Check your finances regularly
When you’re doing your bookkeeping by yourself, the rule of thumb is to not put it off for too long. If you do so, you’ll be faced with piles of paperwork that can overwhelm you. Take time to go over your books every week to ensure that everything is in order.
Review your finances every quarter
At the end of each quarter, remember to go over your books and look for trends, such as growing or declining sales. In doing so, this can provide you with insights on your yearly revenues and your customers’ payment behaviours.
Record all business expenses
No matter how small the business expense is, if it’s for your organisation, be sure to record it so that you will be able to save time when the tax period comes around. Another convenient way to keep records of your expenses is to always use your business credit card for all your purchases related to your company.
Track all account receivables
When your clients don’t pay on time, know that it can significantly affect your cash flow. That is why you need to keep track of all your account receivables. This will also be helpful in keeping track of late-paying clients so that you can follow-up on their payments.
Taking care of your books is a tedious process, especially for startup businesses. By following the tips given above, you give yourself effective methods of tracking your business expenses. Nevertheless, if you struggle to keep up with your books, it is best to hire a business accountant to help you more effectively while you focus on the business itself.
We are one of the leading online accounting firms in Australia. If you want to minimise your tax and maximise your profits, get in touch with us today to see how we can help!