As a small business owner, bookkeeping is something that should never be taken lightly. If you have good financial records, you’ll not only be able to manage your business’s money well, but you’ll also be able to avoid getting into any sticky situations when tax season comes around. Many business owners hire an accountant to take care of all the work for them, but if you’re planning to do it yourself to save money or for any other reason, it’s important that you manage bookkeeping correctly. Here are some tips to keep in mind.
Carefully Track Your Business Invoices
As a business owner, you’re probably aware that any late or unpaid invoices are going to automatically harm your cash flow, leading to an interference with the general running of the business. So, don’t allow your clients to hold off paying what they owe for too long. You can do this by making sure that clients cannot place any other orders until they have paid, or set strict payment deadlines. If the deadline is not met, you can charge a penalty. Sending online invoices and offering incentives for quick payments are also effective methods of encouraging your clients to pay their invoices on time.
Allocate Regular Time to Review Your Books
Many successful entrepreneurs say that taking the time to review your books on a weekly basis is essential for staying up to date on the state of your business. Allocating some time each week to do this will enable you to become more familiar with your weekly expenses, stay informed about current invoices, and manage your cash flow better. You can use this time to monitor and evaluate your income and expenses each week, while quickly tracking down and dealing with any issues that might arise during the week.
Store All Your Financial Records Safely
Ensuring that all documents used in day to day business transactions are stored securely for future reference is one of the most crucial steps to managing your company’s books well. Always ensure that you have all credit card and bank statements, balance sheets, receipts, and invoices for services or sales stored safely. This will make sure that you are able to establish a good financial ground for your business.
Use Accounting Software
If you are not an accountant, then bookkeeping might be something that you’re completely new to. In order to avoid as many mistakes as possible, it’s a good idea to invest in simple accounting software designed for small businesses. Not only does it do a lot of the calculations for you, but it also allows you to access your financial status at any time. There are several accounting software packages to choose from – check out this article by PieSync about some of the most popular options. It goes into detail about reputable tools like QuickBooks to help you determine which is the best fit for your business needs.
Good bookkeeping is essential for keeping your business financially healthy and avoiding any costly mistakes during tax season.
This post has been sponsored and written by Emily Roberts. PlanetCompliance only publishes sponsored content from companies whose products and services we think our audience will find valuable or interesting. For additional information about we handle partnerships and content production, please have a look at the PlanetCompliance Disclosure Policy, which you can find here.