Bookkeeping is one of the most crucial aspects of running a business, but it is often overlooked by many startup business owners. If you are starting a new business, it’s essential to understand the significance of small business bookkeeping services. This aspect of a business should not be ignored. In this blog post, we’ll discuss how you can get bookkeeping right from day one.
Why Does Bookkeeping Matter?
In simple words, bookkeeping involves recording and keeping financial transactions organised. It is about tracking every penny that comes in and goes out of your business. Now, you might be wondering: Do I really need bookkeeping services for my business? The answer is “Yes”, and here are the reasons for choosing bookkeeping services:
- Financial clarity: Think of bookkeeping as your financial roadmap. It tells you where you are heading and where you are currently. As a result, you can make informed business decisions, avoid sudden financial hurdles, and plan for the future.
- Compliance: Keeping accurate and organised records is not just a necessity, it is usually a legal requirement that every business needs to meet. Your local authorities would like to see that you are following rules and regulations, and without accurate business books, that’s difficult to follow. You can also engage a professional tax accountant near you for accurate and timely tax return lodgment. When you find an online ‘small business accountant near me’, make sure to ask if they can help you claim potential deductions to save you on taxes.
- Lender and investor confidence: If you are looking to seek loans or funding, it’s essential to have well-organised financial records to show responsibility and professionalism. It boosts confidence in potential lenders and investors.
How Do You Get Bookkeeping Right from Day One?
When starting a new business, you need to start keeping and organising your financial records from day one. You can also look for bookkeepers in Melbourne to keep your business books updated. Here are some bookkeeping practices that every professional bookkeeper follows:
- Record-keeping: Record-keeping is a fundamental aspect of bookkeeping. These records include receipts, invoices, bank statements, bills, and other financial documents. A professional bookkeeper categorises everything and assigns each financial transaction to a specific category for easy tracking. Make sure to use the right type of accounting software to automate tasks, saving you time and reducing mistakes.
- Bank account reconciliation: With reconciliation, you can easily spot discrepancies and mistakes before they turn into major financial headaches. Bookkeepers compare your financial records with your bank statements. If they find any errors, they resolve those errors to prevent further errors. Each financial transaction is recorded and reconciled to keep accurate records.
- Financial planning and budgeting: Budgeting gives you control over your business finances and prevents overspending. You can easily plan for your future, allocate resources, and set financial goals. Budgeting highlights areas where you might need to cut off extra expenses or where you are not allocating enough resources.
- Tracking income and expenses: It’s essential to keep track of income and expenses. With income and expense tracking, you will know where your money is coming from and going out of your company. An accurate record of your income and expenses can ensure you don’t miss out on potential tax deductions. Your investors also would like to see that you are on top of your business finances, and well-documented income and expenses build trust.
- Practical tracking methods: You can use accounting software to monitor and organise your financial transactions. Make sure to save all your receipts, which are proof of your expenses. Professional bookkeepers set aside time to review your financial transactions.
- Separate business account: It’s highly recommended to use a separate business account for your business. Don’t mix personal account and business account. It helps maintain clear financial separation between business and personal finances, making tax reporting and bookkeeping much easier.
Conclusion
If you are a startup business owner, don’t overlook the importance of reliable bookkeeping services. Bookkeeping is an important aspect of a business, so make sure to keep your business books accurate and updated. It’s highly recommended to involve a professional bookkeeper to keep well-organised financial records.