6 Bookkeeping Tips to Help Your Business in the Holidays
The COVID-19 pandemic hit the business industry pretty hard, especially small businesses. Faced with a drop in revenue and increased expenses, business owners may need to make some difficult decisions. Some of these include requesting clients to pay on delivery instead of in advance or cutting down on travel expenses to save on fuel.
Luckily, something as easy as bookkeeping can help you manage your business more efficiently during the holidays. While it can be tempting to take a break from your bookkeeping during the holidays, doing so will be a big mistake. After all, it can help you be prepared for the next year, which may or may not be profitable for your business, depending on how you plan things out.
This article lists down tips on how you can manage your bookkeeping better, so read on below to get started.
#1 - Determine Your Cash Flow
Before starting your bookkeeping, you should first determine your cash flow pattern–that is, determine how much cash your bookkeeping will bring in and how much you need to expend to carry out your business during the holidays. How much you’ll be spending will depend on how you’ll celebrate the holidays and the amount that you’ll need to fund your celebrations. You can also factor in any seasonal expenses that you may have.
Determining your cash flow pattern will help you plan your bookkeeping accordingly, knowing what you’ll need to spend and how much you’ll be earning.
#2 - Track Your Business Expenses
Business owners who are preparing for the coming year and want to measure how much business expenses were during the previous years should track these expenses. You can also track your business expenses to budget your expenses for the coming year.
Tracking your business expenses allows you to see what your current expenses already are, making it easier for you to decide how much money you can spend on business expenses during the coming year.
After figuring out a budget for business expenses, you can then track your business expenses against the budget. Tracking business expenses will allow you to monitor your spending habits, whether you’re spending too much money or too little, and then you can adjust your spending habits accordingly.
#3 - Go After Late Payments
One of the hardest things to do when it comes to bookkeeping is to go after your late-paying clients, especially if these late payments are causing you a lot of stress. But since you don’t want your cash flow to be hampered by late payments, you should go after them.
You can go after the late payments when your outstanding accounts receivable balance becomes too large and when such payments are causing your business financial problems. For your records, you should have a detailed invoice and payment receipts for every client you’re working with, including their contact information, so that you can easily contact them if they don’t pay your invoice on time.
#4 - Take Care of Your Tax Deductions
For the business owners who will be calculating the income tax for their business for the coming year, you should take care of all your tax deductions by the end of this year to avoid any hassles in making your tax return for your business.
You probably already know what should be subjected to a tax deduction, but be sure to check if you’re entitled to certain deductions, especially if you’re in doubt whether your business expenses are actually deductible.
#5 - Use Digital Bookkeeping Tools
Sure, paper-based bookkeeping was the easiest way to manage your business finances, but with new technology, things have changed, and so has bookkeeping.
If you want to make your bookkeeping task more manageable, use digital bookkeeping tools. With the help of a mobile app or a cloud-based platform, you can easily record your business expenses and transactions and track your business performance. You can even share these data with your accountants, making it easier to manage your finances and make bookkeeping easier.
Bookkeeping can help you manage your business better, so take the necessary time to manage it properly. If you need to, hire a professional bookkeeper to help you manage your bookkeeping, so you can still focus on running your business.
New Wave Accounting provides top-quality bookkeeping services in Gold Coast. We understand that a business must utilise any means possible for growth, which is why we consult on several matters, such as growth strategies and cash flow forecasts, to ensure that your business goals are met. Contact us today to learn more!