Small business owners wear many hats when first starting out. You act as secretary, manager, and bookkeeper all in one. When your focus gets pulled to so many different aspects of your business, your ability to perform well at each task suffers.
Stay on top of your finances until you can hire someone to help with these 7 easy bookkeeping tips for small business owners.
One of the biggest mistakes new business owners make is to mix their business and personal finances. This is a major mistake. Mixing business and personal finances results in serious issues when you go to do taxes.
You should also open a separate business bank account and switch to a business credit card. This way if you struggle to make payments, it only reflects on your business’s credit rating and not your personal one.
You should automate your bookkeeping process whenever possible. If you do not want to hire another employee or take care of business financials yourself, bookkeeping software works wonders.
Choose a cloud-based software to ensure your vital financial information gets backed up into the cloud. This eliminates worries of power outages or hard drives crashing. You can also link your bookkeeping software to your business bank account to keep everything up-to-date.
Time-tracking software makes life easier for your employees since they can clock in on a computer or through their smartphone. They can also double-check their hours and any paid-time off they have available.
Most tracking software allows you to manage your employees’ vacation time, sick time, overtime, and more. Try to choose software that will integrate with your bookkeeping software for an easier time processing payroll. Or have the software auto-fill into a paystub template if you cannot integrate it.
Employee hours are not the only thing you need to track. Smart business owners monitor and document every single business expense they incur throughout normal operations and in emergencies.
Keep organized and detailed records of all expenses you plan to claim on your tax return. You should also avoid cash transactions and use credit cards instead to simplify tracking your expenses.
Even if you are not a fan of numbers, you need to check your books and records to ensure everything balances out on a regular basis. This helps you avoid bounced checks and missing out on unpaid invoices.
Review your books once a week for any glaring errors. Then check them again every quarter to evaluate the current state of your finances. The sooner you recognize issues, the faster you can resolve them.
Most small businesses owe money when filing their taxes. Plan ahead for this and set aside some money every month to cover this bill. Check out the IRS’s helpful business tax calendar to avoid fines by paying on time.
When in doubt, turn to a professional. Sometimes you cannot find a reasonable accounting software off the shelf or cannot afford to customize your own. Hiring a professional bookkeeper or accountant will get you the help you need before everything falls apart.
More Bookkeeping Tips and Accounting Advice to Boost Your Revenue
These 7 bookkeeping tips should make a big difference to your small business finances right away. They’ll help you keep track of your money better and ensure you get paid when you should.
Want more expert accounting advice? Check out the MNB Payday Loans blog for tons of articles on acquiring business loans, paying taxes, and more. Small business owners should never underestimate the importance of financial planning.