Being a business owner, it is your responsibility to involve yourself in the financial management of your organization or business. Most of the businessmen invest their time in record keeping. They keep an eye on every expense and deposit so they can reduce unnecessary costs. If you have a good financial record, then you may have to pay less tax on money that is not income.
If you are a startup and unaware of what approach you need to follow to make bookkeeping easier, then you can keep reading this blog. Here, we’ll provide you guidance for better small business bookkeeping. Let’s take a look:
Guidance on Small Business Bookkeeping
The following are some essential tips for better small business bookkeeping:
- Separate Your Business and Personal Banking
When you mix up your business and personal finances, it can add more complexity in accounting. So, it is suggested to keep them separate from each other to handle accounting easy. It becomes easier to keep one record accurate, instead of handling two records at the same time. It will save a lot of time by separating these accounts.
- Use Cloud-Based Accounting
If you are one of those who use manual working, then you must consider using cloud-based accounting. Various accounting software can be used to minimize the unnecessary workload. You can also connect bookkeeping software with your bank account to get the up-to-date and accurate record. Additionally, with the help of the cloud, your important data can be backed-up securely off-site.
- Keep Track of Your Invoices
Your unpaid or late bills can impact your business credit badly, and worse affect your tax payments. Ensure to organize your bills and always make payments on time. Make sure to keep your payment receipts safe in the case.
- Keep an Eye on Your Finances
Being a business owner, you must give some time to your finances at least half an hour a week. This is because to check whether something is okay or not. In this way, you’ll have full information about your business every week. Plus, everything will be sorted when tax time comes.
- Avoid Making Payments in Cash
In this digital world, try to make your all payments through credit or debit card. When you use cash, it may be difficult for you to keep track of your purchases. With debit or credit card, you can keep track of what amount you spent on which item. This method of payment is much easier than cash payment.
- Track Time to Meet Deadlines
As a business owner, sometimes it is difficult to remember deadlines. If you want to avoid skipping deadlines, you need to set reminders. You can add the due date of the business tax return and set other reminders to ensure you don’t skip any upcoming due dates. To make it easier, you can use a digital calendar to keep track of important dates.
- Maintain Records of Your Business Expenses
You can set aside money for high expenses like office supplies, inventory, maintenance, and repairs. You can maintain a budget for your small business, so you don’t need to worry about these expenses in the coming years.
- Handover Bookkeeping Responsibilities to Professional
For a startup, you may have a budget problem, and to conserve your cash, you may want to maintain books on your own. It is one method to save your money. However, when you grow your business, at that time, you need to hire a professional bookkeeper. Once you hired a professional, you’ll be less likely to waste your time maintaining records on your own.
- Outsource Your Bookkeeping
When you don’t have time to keep a record of business on your own, then you can outsource your bookkeeping. It comes with various benefits, including:
- Wallet-friendly: It is cost-effective because you need to pay for some hours instead of paying a regular wage.
- Correct record: It is obvious if you hire a professional so there are higher chances that your record will be accurate.
Professional will need around 2 to 4 hours to complete one month’s bank transactions, completing bank reconciliation, and delivering reports. You can outsource as per your requirements. You can divide the tasks among the bookkeeper and other employees.
- Save Money for Taxes
Maintaining a proper record of finances can help you to prepare yourself for taxes at the end of the year. You don’t need to cut back at the end of the year if you save money each month for your taxes. In this way, you’ll be prepared before paying small businesses taxes.
You Decide Your Next Step!
No matter whether you are a startup or experienced, but you need to follow some tips and tricks to maintain a record of financial transactions. How you organize your business and how you operate, will depend on good bookkeeping and accounting. While opting for any accounting software, make sure to get help from a trained accountant. Keep all the above points in your mind if you want to run a successful business.
You can opt for different bookkeeping companies in Melbourne, Australia to get different services as per your requirements. In fact, you can contact us to get bookkeeping services for small to large businesses.