Do you think your company's bookkeeping can be fine-tuned with a few adjustments? Understanding how to handle small business bookkeeping can be a thorn in the side for any business owner.
However, that doesn't have to be the case for you. Take a look at five excellent tips you can use to take your bookkeeping to the next level.
1. Have Separate Personal and Business Bank Accounts
This is the most important aspect of managing your small business bookkeeping. It's never smart to combine your personal financial accounts and your business accounts. You can quickly get into the habit of spending money that you really don't have available from your budget.
One rule of thumb is to create an account completely separate from your personal bank. If you use a national bank for your everyday finances, consider opening up an account with a federal credit union or even go with PayPal as an alternative online payment service.
If you're able to keep your accounts separate, you'll quickly realize that balancing both of them doesn't have to be a monumental task.
2. Conduct Weekly and Quarterly Reviews
Once you have your accounts separated you can focus on tracking all your expenses and income for your business. Most small business owners will check their accounts on a weekly basis. This is a habit that you should be willing to start if you haven't already.
It's also very smart to do a quarterly review of your account if you file your taxes on a quarterly basis. This will give you the opportunity to put away enough to cover the taxes that you'll need to pay since you don't receive a regular paycheck coming in when you own your own business.
3. Purchase Time Tracking Software
Depending on the scale of your company, it may be smart to purchase time tracking software to monitor your employees. This software is crucial in determining how much you need to pay your employees on a weekly or bi-weekly basis.
If questions arise about how many hours an employee worked, you can simply go to the software and find out when the work was done. If you decide to go with a time tracking software, make sure you're comfortable using it before making a huge investment.
4. Treat Your Checks Like Cash
If you sign checks as a part of covering business expenses, you'll want to keep a thorough record of all the transactions. A check is as good as cash.
If one bounces or there is an issue with attempted forgery due to a poor signature, it will be your responsibility to make things right with the recipient.
5. Buy a User-Friendly Accounting Program
Much like the software you'll use to track your employee's hours worked, having a strong accounting system is a must for any small business owner.
There are a number of free and paid options available depending on the size of your business. Having user-friendly accounting software will make all your bookkeeping needs that much easier.
Small Business Bookkeeping Tips You Can Use
Now that you understand some new ways to improve your small business bookkeeping, which tips are you ready to incorporate today?
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