Small or big every business owner should have accounting habit. Otherwise, you would face a big problem in future and that would be affected your business very badly. You should go with a system so that in future your business run smoothly and you can sleep a sound sleep at night. A perfect bookkeeping system could increase your business earnings too. If your business run right way your mind will stay in good mood and if not that could also affect your mood and personal life too.
So not only for your business but also for your personal life, you should have a perfect bookkeeping habit. Bookkeeping is a necessary part of any business and any business owner shouldn’t avoid that. Your business relates all the receipts should be in one place and places them in such way so that when it’s time to need you can them easily. As a business owner, you have lots of financial details on your head but bookkeeping could less that difficulty.
In below I will share with you how to organize your bookkeeping.
Make the expense list for your business
You should make a plan for your monthly expenses and keep a separate list for your personal and business expenses. That’s way you can understand clearly how much you are spending for your business and how much you are getting profit from your business.
This way you are recording how much you spent last month on your business. At the end of every month check how much you earn and how much you spent. If you’re earning is more than your cost, then you have got profit this month.
Save Money for major expenses
The cost to be spent on futures for any major expense you should have planned for that from before. Otherwise, the situation would be like that- you didn’t separate any money for that major expense and when it’s come to the time you have to do that but you don’t have money. To save money for the major expenses and always stay ready for all those expenses.
Monitor your personal and your customer’s unpaid invoices
Your unpaid invoices should be paid at the right time. Otherwise, you may have to make extra speeds for letting payments. Check out your business clients’ unpaid invoices too, if you keep your customer’s unpaid invoices for a long time your business profit may be affected. So you should give them a deadline for their unpaid invoices should be paid in due time, and crossing the deadline requires a certain amount of fine. Your customer’s unpaid invoices should stay in this system for keeping your profit right way.
With this being said, just because you are part of a business or run your own, doesn’t mean the financial side is your forte. Let’s face it, not everyone is the best at maths. So this side would be a struggle doing this on your own. If this is a situation you are finding yourself in, why not look into using the services of accounting freelancers, who can hep get your accounting and finances in order.
Make a Monthly Report of Your Expenses
At the end of each month, you will check how much money you spend in this month and how much you earned, then if your profits are more than your cost, congratulation your business in the right track, if not, then you should change your business strategy.
Save for Taxes
Related: Find more information about tax planning and save tax on low and much high monthly income.
Some businesses have to pay tax. If you are in that kind of business, then you should take separate money from your profits beforehand for your tax issue, so that when the time comes to submit the tax, the money will be ready. If you do not make a tax payment in due time, you can face a big problem. So, the money should be kept ready for your tax already.
There is a lot of work to be done for a business, so you can forget about tax matters and it can be a big issue for your business, handling everything so much troubling by yourself alone. So, if you want to make your tax-related work easier, it will be better for you to take a tax planning service from a company offering tax and account management services.
Use a separate business credit card
It would be better to use a different credit card for those costs which you do for your business. By doing this you will not be confused at the end of the month that how much money you spend on personal purpose and how much money you spend on business. It will be better if you use different credit cards for personal and business.
Stay ready for rainy day
For your unexpected bad time, you should always keep aside money for that bad day. This will reduce your hardship at that time.
All the business-related papers should be kept in a different place so that it will be easy to find them in needed time.
Use credit card
If you use cash it will be hard to truck you spends but if you use credit or debit card it will be easy for you to keep your expenses as it has a record. It will be better than do all of this for your business by yourself but if you don’t have enough time, in this case, you can take help by an assistant.
If you follow these tips I hope your business accounts will remain on the good track. At least one hour in a week should track bookkeeper that is everything going on with your business! This nice habit will help you to run your business properly. Best of luck for your business, stay well.
Author:- Abdul Quddeus is a CPA, CGA and founder of MAQ CPA Professional Corporation. He helps small business owners, professionals and individuals save their hard-earned money on taxes and let them free up their time to concentrate more on core business by providing tax planning and compliance, bookkeeping and accounting services.